The Development and Governance of Private Universities in China (Governance and Citizenship in Asia) 9811960623, 9789811960628

Table of contents :
Foreword
Preface
Contents
About the Author
List of Figures
List of Tables
1 Introduction
1.1 Significance of the Study
1.1.1 Significance in Practice
1.1.2 Significance in Policy
1.1.3 Significance in Academics
1.2 Research Questions and Approach
1.3 Structure of the Book
References
2 Private Education in Ancient Times and the Republic of China
2.1 Private Education in the Period BC
2.2 Private Education in the Period AD
2.2.1 The Sui, Tang, and Song Dynasties
2.2.2 The Yuan, Ming, and Qing Dynasties
2.3 Private Higher Education in the Republic of China
2.3.1 Private Institutions Run by Churches
2.3.2 Private Institutions Run by Individuals
2.3.3 Features of Private Higher Education in the Republic of China
References
3 Development of Private Higher Education in the People’s Republic of China
3.1 Exploration in the 1980s
3.2 Development in the 1990s
3.2.1 Social Background
3.2.2 Policy on Private HE
3.2.3 Diploma Examinations for Higher Education Degrees
3.3 Expansion in the 2000s
3.3.1 Expansion of Higher Education
3.4 Policy for Private Higher Education
3.5 Classification Support and Supervision
References
4 University Governance in the People’s Republic of China
4.1 CPC Within National Bureaucratic System
4.2 Governance of the Public University
4.3 Governance of the Private University
4.4 University Communist Party Committee
4.5 University Council and President
4.6 University Constitutions
4.7 Differences of the Governance in Public University and the Private University
References
5 Theoretical Perspectives and Research Design
5.1 Theoretical Orientation
5.1.1 Governance Reflects Power Dynamics of Organization
5.1.2 Reasons to Choose Two Theories
5.1.3 Principal-Agent Theory
5.1.4 Stewardship Theory
5.2 Method
5.2.1 Qualitative Case Studies
5.2.2 Brief Introduction of Case A
5.2.3 Brief Introduction of Case B
5.2.4 Brief Introduction of Case C
References
6 Governance in Practice: University with a Disjointed Council and Executive Team: Case A
6.1 Council and Shareholder
6.2 Executive Team
6.3 University Communist Party Committee
6.4 University Constitution
7 Governance in Practice: University with a Conjoined Council and Executive Team: Case B
7.1 Council and Shareholder
7.2 Council and Executive Team
7.3 University Communist Party Committee
7.4 University Constitution
8 Governance in Practice: University with a Paternal Council and Executive Team: Case C
8.1 Council and Owner
8.2 Executive Team
8.3 University Communist Party Committee
8.4 University Constitution
9 Form of Governance and the Factors that Shape It
9.1 Features of Different Governance Forms
9.2 Supervision Form
9.3 Managerial Form
9.4 Factors that Shape the Form of Institutional Governance
9.4.1 Stages in University Development
9.4.2 Foundation Stage
9.4.3 Stage of Establishment
9.4.4 Characteristics of Shareholders
9.4.5 Nature of Senior Managers
9.5 Implications for the Private University
9.6 Limitations of the Study
9.7 Revisit Three Cases Studies
9.8 Recommendation for Future Studies
References
Appendix Interview Questions

Citation preview

Governance and Citizenship in Asia

Xu Liu

The Development and Governance of Private Universities in China

Governance and Citizenship in Asia Series Editors Kerry J. Kennedy, The Education University of Hong Kong, Hong Kong, China Sonny Shiu Hing Lo, School of Professional and Continuing Education, The University of Hong Kong, Hong Kong, China

Aims and Scope This series explores how citizenship is shaped by social, political, cultural and historical contexts and how it may be moulded to serve the nation state in the age of globalization. In these publications we see how governance relates to all aspects of civic life, including politics, public policy, administration, civil society and the economy, as well as the core values of society. Titles cover themes including public trust and trust building, the role of civil society, citizens’ rights and obligations, citizenship identities including those related to gender, class and ethnicities. Authors explore how young people are shaped by democratic and traditional value systems and the importance of citizenship challenges in the Asia Pacific region. Research collaborations in this interdisciplinary series probe questions such as: What are the links between ‘good governance’ and new forms of citizenship? What is the role of citizenship education as a tool in state formation and the development of active citizenship cultures? How do we explain the distinctive features of governance and citizenship in Asian societies? Through these publications we see that citizenship is an integral part of ‘good governance’ and that such governance ultimately enriches citizenship. Scholarly investigation and academic dialogue in this series describe the interdependence and mutuality of governance and citizenship. Please contact Melody Zhang (e-mail: [email protected]) for submitting book proposals for this series.

Xu Liu

The Development and Governance of Private Universities in China

Xu Liu Center for Higher Education Research Southern University of Science and Technology Shenzhen, Guangdong, China

ISSN 2365-6255 ISSN 2365-6263 (electronic) Governance and Citizenship in Asia ISBN 978-981-19-6062-8 ISBN 978-981-19-6063-5 (eBook) https://doi.org/10.1007/978-981-19-6063-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Foreword

The development and governance of private universities in China is a topic of great interest to all those who wish to have a better understanding of China’s rise in recent years and its potential contributions to global educational thought. What makes this volume especially attractive to the reader is the personal background of the author who graduated from Sichuan Normal University, an influential institution in China’s Southwest region, and spent more than ten years contributing to the emergence and development of private universities in the province of Sichuan. She is thus able to develop an engaging personal narrative about each of the three cases which are profiled, illustrating the differing ways in which private universities emerged and the diverse and distinctive governance patterns that took shape as they developed a degree of autonomy somewhat greater than that in the public system. Each institution formalised a constitution defining its patterns of leadership in the new spaces that opened up during the reform period initiated by Deng Xiaoping. The very possibility of private higher education flourishing in a socialist state shaped by macro-economic planning after the Revolution of 1949 is intriguing. Even more so is the potential for comparison with other East Asian countries with a shared Confucian legacy. In both Japan and South Korea, private higher education was crucially important to the achievement of a mass higher education system providing opportunities to a rapidly increasing percentage of the age cohort and reflecting the enormous importance East Asian parents give to the education of their children, no matter the cost. For China, the first decade after the end of the Cultural Revolution, saw the revitalization of a highly elite system of public higher education, that only began responding to pressing demands for expansion of opportunity in the 1990s. This was the time when private institutions began to emerge and this volume documents the government legislation that made this possible, and the ways in which it was elaborated over time to allow both for-profit and not-for-profit institutions that now serve around 8 million students out of a total of 42 million. While the main focus of the volume is on patterns of governance and leadership, readers will be drawn into the question of how the kinds of local initiative and social responsiveness that characterize these institutions may provide some kind of balance to the highly regulated and strikingly v

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hierarchical public system, with a small percentage of universities recognized as world class or having world-class programs and funded accordingly. What many readers may not realise is that private higher education played an important role in China’s educational history. Therefore, the author has devoted a full chapter to the history of Chinese private higher education, beginning as early as 2070 BCE and suggesting private higher education began to flourish in the period between 770 and 221 BCE. Over the same period, a state system of higher education also developed and became fully formed with the emergence of the famous civil service examination system or keju in the early 7th Century CE. Given the reputation and influence of this model and the meritocratic values it embodied, it has gained significant international attention, while much less is known about China’s achievements in private higher education. The historical overview in chapter two highlights the important balancing role of the private academies or shuyuan which emerged in the early 7th century CE in Sichuan (where Dr. Liu’s study is based) and provided a counterbalance to the dominant civil service system, making possible forms of critique and independent reflection that were essential to the stability and health of the public system. In a somewhat parallel way, private higher education made a significant contribution to the Republican era after the end of the last imperial dynasty in 1911. Particularly striking was the commitment to full female participation in higher education, innovation in new areas such as modern medical and nursing education, journalism and social work, also a space for debate and critical comment that was less possible under the political control exercised through the public system. Readers are thus encouraged to reflect on the kinds of vision and values that China’s emerging private universities will inculcate in their students. Although a lower tier in terms of social status, their graduates may have a profound influence on civil society at the local level and offer a voice that demands accountability from above. China’s higher education has always been characterized by forms of intellectual freedom quite distinct from the Western tradition of academic freedom and likely to encourage both critical reflection and courageous action for the public good. Ruth Hayhoe Professor O.I.S.E., University of Toronto Toronto, Canada President Emerita The Education University of Hong Kong Ting Kok, Hong Kong

Preface

This book is an expanded and revised version of my PhD research which I finished in 2018 at the Institute of Education, University College London. It contributes to the area of higher education (HE) management and governance, focusing on the governance of private universities in China, and was inspired by my personal educational experience and later employment. I received a B.A. in Education Studies from Sichuan Normal University (SNU), which is financed and governed by the Sichuan provincial authorities. During this time, I was the President of the Students Union of both the university and then Sichuan Province. As such, I participated in a number of university governance-related meetings with senior managers and staff as a student representative. This helped me understand what different stakeholders in the university considered important and how the university met its requirements. SNU was also the first university to initiate a privately financed college in Sichuan Province. After graduating, I worked in the company established by SNU to handle the administration of a number of private colleges. As the administrative officer, I saw how the Council members developed the relationship between the Council and the private colleges. With colleagues, we explored whether or not the Council members should participate in the daily operation of the colleges, how the work performance of senior managers should be evaluated, and the best way to monitor the colleges’ financial management. I remember that, at one college, the President and the Secretary of the College Communist Party were in dispute regarding their different responsibilities, and both asked the Council for its support. Unable to get the two to compromise, the Council appointed a new President and a new Secretary. These issues always involved the distribution and control of power, which greatly affected the development of the college and the interests of other stakeholders, including students and staff. In 2009, I started work at the Sichuan Educational Department (SED). I worked on the statistical analysis of private HE and had an administrative role relating to the evaluation of private institutions. My responsibility was to assist in the collection and organization of data relating to emerging private institutions. This gave me access to

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different universities and a variety of sponsors, senior managers, and government officials. I observed conflicts between the governing body and the President concerning their responsibilities and rights in private universities. This made me very aware of the diversity of private universities and the importance of government legislation. During this period, I participated in the periodic national evaluation process of two private institutions and in the writing of the Twelfth Five-Year Education Developmental Plan for Sichuan.1 These experiences caused me to start considering private HE from a macro perspective. In 2011, a private college, sponsored by the company that I had previously worked for, became a faculty of the university and I returned to work there as one of the faculty leaders in the role of Vice Secretary of the Communist Party. My team was responsible for student affairs including accommodation, psychological counseling, and career counseling. I felt a great sense of responsibility and tried to improve the support available for every student, whether they were struggling financially or academically. Countless days and nights working with students, and sometimes with parents, drove home how the HE experience of each student would affect their whole lives. Meanwhile, as a leader within the faculty, I coordinated with other leaders to address issues such as teaching arrangements and student recruitment at the university level. As a result of these experiences, I came to understand the running of a university from the micro perspective of the faculty level. When I began my PhD research in 2013, there were over 700 private colleges in China. Some people were expressing doubts about these privately sponsored and managed colleges and some in the media criticized the government’s supervision of private universities. Several officials claimed that these private institutions were not adhering to government policy and parents began to wonder whether their children would obtain a valuable qualification and a worthwhile education in private universities—despite paying tuition fees that were double or even three times higher than that of public universities. In particular, many people questioned sponsors’ motivations and how these affected the governance of private universities. These questions led me to undertake my study about the development and governance of private universities in China. I am grateful to the Chinese National Education Science Fund which funded my research proposal ‘Institutional Governance of Private Universities in China’ in 2014 and subsequent research The Performance of Governance of Chinese Private Universities’ in 2021. I must express gratitude to my PhD supervisor Professor Andrew Brown. His guidance and encouragement enabled me to be confident when walking amidst many uncertainties during my research. I would like to thank Professor Simon Marginson, Dr. Steven Cowan, Dr. Paul Temple, Dr. Vincent Carpentier, and Dr. Jon Swain for their academic advice. Thanks also for the discussions arising from the Program for Research on Private Higher Education organized by Professor Daniel Levy, which inspired many thoughts about private HE during the revising of the manuscript of this book. Thanks to Professor Ruth Hayhoe for writing the forward 1 The process of five-year plans began in 1953. These established development targets in a variety of social and economic spheres. The Twelfth Five Year Plan spanned the years 2011–2015.

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and her valuable feedback on the manuscript. Special thanks to Professor Ian McNay for his generous advice and countless constructive suggestions on my academic work. Thanks to Dr. Kate Young and Ms. Sue Redgrave who read the manuscript. I would like to thank the editorial team from Springer for their professional work. I wish to express my appreciation to all the participants in this study, especially the senior managers and scholars who were always willing to share their experience, expertise, and insightful comments with me. I would not have been able to explore this study without their participation. Thanks also to my many friends who walked with me through the study.2 I must express special gratitude to Dr. David Burnett and Anne Burnett. Thank you for all those times you stood by me and for your unconditional companionship. I wish to express appreciation to my family for their love. I am forever indebted for your love. Shenzhen, China

2

Xu Liu

Liu, X. (2021). Institutional governance in the development of Chinese private universities. Higher Education. 79 (2): 275–290. Liu, X. (2018). The development of private universities in socialist China. Higher Education Policy. 33(2): 1–19.

Contents

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1.1 Significance in Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1.2 Significance in Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1.3 Significance in Academics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Research Questions and Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 1 5 7 9 10 11

2 Private Education in Ancient Times and the Republic of China . . . . . 2.1 Private Education in the Period BC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Private Education in the Period AD . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 The Sui, Tang, and Song Dynasties . . . . . . . . . . . . . . . . . . . . . 2.2.2 The Yuan, Ming, and Qing Dynasties . . . . . . . . . . . . . . . . . . . 2.3 Private Higher Education in the Republic of China . . . . . . . . . . . . . . 2.3.1 Private Institutions Run by Churches . . . . . . . . . . . . . . . . . . . . 2.3.2 Private Institutions Run by Individuals . . . . . . . . . . . . . . . . . . 2.3.3 Features of Private Higher Education in the Republic of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15 15 18 18 20 22 22 27

3 Development of Private Higher Education in the People’s Republic of China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Exploration in the 1980s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Development in the 1990s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Social Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.2 Policy on Private HE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.3 Diploma Examinations for Higher Education Degrees . . . . . 3.3 Expansion in the 2000s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3.1 Expansion of Higher Education . . . . . . . . . . . . . . . . . . . . . . . .

29 32 35 36 40 40 42 48 49 49

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3.4 Policy for Private Higher Education . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Classification Support and Supervision . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52 58 61

4 University Governance in the People’s Republic of China . . . . . . . . . . 4.1 CPC Within National Bureaucratic System . . . . . . . . . . . . . . . . . . . . . 4.2 Governance of the Public University . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Governance of the Private University . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 University Communist Party Committee . . . . . . . . . . . . . . . . . . . . . . . 4.5 University Council and President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6 University Constitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7 Differences of the Governance in Public University and the Private University . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65 65 66 68 69 71 72

5 Theoretical Perspectives and Research Design . . . . . . . . . . . . . . . . . . . . . 5.1 Theoretical Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.1 Governance Reflects Power Dynamics of Organization . . . . 5.1.2 Reasons to Choose Two Theories . . . . . . . . . . . . . . . . . . . . . . . 5.1.3 Principal-Agent Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1.4 Stewardship Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Qualitative Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.2 Brief Introduction of Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Brief Introduction of Case B . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 Brief Introduction of Case C . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77 77 77 79 80 84 86 86 91 92 93 94

74 76

6 Governance in Practice: University with a Disjointed Council and Executive Team: Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 6.1 Council and Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 6.2 Executive Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 6.3 University Communist Party Committee . . . . . . . . . . . . . . . . . . . . . . . 107 6.4 University Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 7 Governance in Practice: University with a Conjoined Council and Executive Team: Case B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Council and Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Council and Executive Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 University Communist Party Committee . . . . . . . . . . . . . . . . . . . . . . . 7.4 University Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113 113 115 119 120

8 Governance in Practice: University with a Paternal Council and Executive Team: Case C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 8.1 Council and Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 8.2 Executive Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

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8.3 University Communist Party Committee . . . . . . . . . . . . . . . . . . . . . . . 130 8.4 University Constitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 9 Form of Governance and the Factors that Shape It . . . . . . . . . . . . . . . . 9.1 Features of Different Governance Forms . . . . . . . . . . . . . . . . . . . . . . . 9.2 Supervision Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Managerial Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 Factors that Shape the Form of Institutional Governance . . . . . . . . . 9.4.1 Stages in University Development . . . . . . . . . . . . . . . . . . . . . . 9.4.2 Foundation Stage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.3 Stage of Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4.4 Characteristics of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 9.4.5 Nature of Senior Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 Implications for the Private University . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7 Revisit Three Cases Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.8 Recommendation for Future Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 135 136 138 141 141 141 142 146 147 149 153 154 156 157

Appendix: Interview Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

About the Author

Dr. Xu Liu has worked as an administrative officer for provincial education department and the Council of private colleges, also a member of the leading committee of a private college. She received her Ph.D. from IOE, UCL’s Faculty of Education and Society. Xu has presided over more than ten research projects. Her research mainly focus on higher education policy and management. She now works as an Assistant Professor at Southern University of Science and Technology officially established in 2012. The university is widely regarded as an innovator in advancing China’s higher education. Xu’s ORCID: https://orcid.org/0000-0002-1567-7925. Contact email: [email protected]

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List of Figures

Fig. 4.1 Fig. 4.2 Fig. 4.3 Fig. 5.1 Fig. 5.2 Fig. 5.3 Fig. 6.1 Fig. 7.1 Fig. 8.1

Organizational structure of UCPC of the public university in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Description of UCPC in the private university . . . . . . . . . . . . . . . . Comparison of institutional governance in private and public universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Understanding of principal-agent theory . . . . . . . . . . . . . . . . . . . . . Principal-agent theory in relation to governance of private university . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stewardship theory in relation to the governance of the private university . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form of Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form of Case B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form of Case C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68 71 76 81 82 86 109 116 132

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List of Tables

Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 4.1 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 6.1 Table 6.2 Table 6.3 Table 7.1 Table 7.2 Table 8.1 Table 8.2 Table 9.1

Number of participants in the university entrance examination, 1977–1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary of policies and regulations relating to the nature and status of private HE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of private universities and students (1993–2004) . . . . . . Number of private universities from 2004 to 2013 (Seven-Party Institute of Education, 2016) . . . . . . . . . . . . . . . . . . Sources of Funding for Private Universities (2011–2012) (Ministry of Education, Ministry of Education, 2013a, b) . . . . . . Breakout phase policy text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hierarchical level of Chinese government departments . . . . . . . . Differences between the theories of principal-agent and stewardship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Overview of the interview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sources of data collection in this study . . . . . . . . . . . . . . . . . . . . . Themes relating to data analysis . . . . . . . . . . . . . . . . . . . . . . . . . . Council member of Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Team of Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form in different developmental stages of Case A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive team of Case B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form in different developmental stages of Case B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive team of Case C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Governance form in different developmental stages of Case C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Comparison of supervision and managerial forms of governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36 44 50 50 52 55 66 85 88 90 90 100 103 111 114 121 128 134 141

xix

xx

Table 9.2 Table 9.3

List of Tables

The years spent in different stages by the three case universities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Features of governance form in different stages of the private university . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144 145

Chapter 1

Introduction

Learning without thinking leads to confusion, thinking without learning ends in danger. —Confucius (2006).

1.1 Significance of the Study 1.1.1 Significance in Practice The private university in this study refers to a HE institution that is not directly funded by governmental departments or budget, and awards a diploma of HE1 or degree after three or four years of full-time study. There are five significant points to take into account when studying the governance of private universities. the first three relate to the development of the university and the latter two to the external environment. First, the rapid expansion of the private university has caused a number of issues, which have affected its development. China has more than 7.08 million students pursuing full-time studies leading to a diploma or bachelor’s degree in 771 private universities; This means the number of students enrolled at private universities accounts for 21% of all students and the number of private universities accounts for 24% of universities in the whole HE system (Ministry of Education, 2021). In contrast, in 1996, only 12,000 full-time students were enrolled in private universities. In other words, the number of full-time students in private universities increased more than 500 times within 25 years. Zhong (2011) points out that private universities attracted a lot of private capital and have both relieved financial pressure on the government and satisfied the public demand on the HE sector.

1

In Chinese: 专科.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_1

1

2

1 Introduction

However, the rapid expansion of private HE systems in China in the past few decades has had unintended social consequences; in particular, there has been a crisis in its governance (Mok, 2016, Mok, Wen et al., 2016). Both government and scholars argue that it is necessary to improve the governance of private universities. Ten years ago, the Announcement on Strengthening Standard Management of Private University and Guide Healthy Development of Private Higher Education (General Office of the State Council, 2006) states that there were serious problems to do with student status recognition, degrees awarded, and tuition fees charged. It states that one important reason for these issues was the poor institutional governance of private universities. In many private universities, the form of institutional governance presents a number of problems including an unclear division of responsibilities between shareholders and senior managers and apparently random interventions of shareholders in the daily affairs of the university. A similar view is expressed by some scholars (Zhong, Zhao et al., 2010a, b; Zhong, 2011; Zhou, 2014), who state that the institutional governance of private universities in China urgently needs to be improved. Li and Morgan (2008) point out that it is common that the university Council, as a governing body, is often entirely occupied by shareholders and the major shareholder acts as the university President. They further emphasize that, Many founding presidents or chancellors of private HE institutions in China were entrepreneurs or well-placed government officials. Again, many private HE institutions are subordinate to big private enterprises (Li and Morgan, 2008).

These big private enterprises usually expect some economic return from their investment in private universities. One of the key issues of this developing governance system is the failure to protect the interests of key stakeholders such as the staff and students when it pursues economic return. Sometimes these failures attain a high public profile. An example of this is the Bowen Institution of Lanzhou Jiaotong University, a private university, which dismissed a member of staff with the President’s agreement when she suffered from cancer in 2016. This was widely reported in the media (Xinhua News Agency, 2016). When this staff member asked to keep her position as it gave her medical insurance, the personnel department refused the request giving her continuous absence as the reason. The court told the university in writing that the expulsion was invalid, but the college refused to implement the court order. When she died with a substantial debt without medical insurance, it was reported by the press and immediately attracted public criticism. As in many private universities, the largest shareholder of this university comes from a background of business and probably has limited knowledge of the principles underlying the governance and management of universities. Running a university can be viewed as being just the same as running another type of enterprise. In fact, the largest shareholder acted both as the Council Chair and university President and has absolute power in institutional governance. When power is unsupervised, the running of a university is a risky situation. As a result of the public outcry, the regional provincial educational department now states that the Council Chair cannot take the position of President. Nonetheless, this simple and mandatory order may

1.1 Significance of the Study

3

not be appropriate for all private universities in this region as some are in different developmental stages and have different requirements. Second, family governance in the private university is widespread which could curtail the other stakeholders’ interests. These “family member” shareholders account for a high percentage of the membership of the Council which is the highest decision-making body of private universities. The family universities are often established with the idea of making money or wielding influence, and typically have strong and centralized administrative control, with offices in the hands of family members (Altbach, 2005). Altbach notes that the family control form is also popular in many counties such as Mexico, Thailand, Japan, South Korea, and India. As Wang (2012) observes that the advantage of power devolution in the family governance form exists from the first generation to the second, but is not sustained thereafter. Such family governance in a company might have a positive influence on the performance of the corporation (Anderson & Reeb, 2003; Maury, 2006). Nevertheless, a common recognition is that private universities differ from private enterprises because of the nature of their educational mission. This commits them strongly to public well-being and demonstrates a degree of social responsibility. By supporting the private university sector, the government is committed to the improvement of the wider economy and society; industry expects to have access to graduates with excellent professional skills; university employees look forward to career progression and students to obtaining qualifications and experience that will benefit their career and personal development. Thus, while these private universities seek profitability in the interest of the family as an owner, they must also consider their public obligations and the interests of all stakeholders. Third, private universities in China have already experienced the primitive accumulation phase and recently begun a new phase. This process of transformation requires the private university sector to reflect upon its orientation and position itself appropriately in order to keep pace with new circumstances and requirements. Some scholars have called this new stage, “a stage of stability and improvement” (Wen, Liu et al., 2008), “the period of developmental transformation” (Shen, 2009) or “a move towards being chosen by preference rather than being seen as offering a supplement to standard provision” (Chen, 2008) and “the stage of sustained development” (Bie, 2010). In order to deal with the challenges of this stage, the private university should, according to Zhong, Zhao, and Hong (2009): . Strictly limit the random intervention of shareholders in the daily management of the universities and improve the supervision of the daily management. . Formulate a constitution that clarifies the relationship between the government, society, universities, and other stakeholders. Similarly, Xu (2012) argues that a private university should improve the system of the Council and an effective supervision system for daily management to enhance institutional governance. In turn, Tan (2013) states that improving the system of Presidential Accountability under the Leadership of the Council is the main task of private universities.

4

1 Introduction

Fourth, the increasing financial gap between public and private universities requires that private universities improve the efficiency of their governance. According to the Ministry of Education (2012a, b), the national education budget was 4.28% of Gross Domestic Product (GDP) in 2012, which surpassed the 4% of GDP target set out in the Outline of Chinese National Plan for Medium and Long-term Education Reform and Development (2010–2020) (Outline of Education Reform and Development) in 2010 (State Council, 2010). Across the whole world, in 2010, total public expenditure on education on average accounted for 4.58% of GDP (UNESCO, 2014).2 Compared with international standards, the percentage in China is low. but nevertheless, it is the highest ever recorded for the country. The funding for regional universities comes mainly from the regional governments, and as a result, universities in different provinces show significant differences in funding levels. In terms of the requirement of this percentage, the 2010 document, Opinion about Further Improving Funding Levels of the Local Undergraduate Course of Ordinary Universities (Ministry of Education & Ministry of Finance, 2010), states that the per student capita funding of regional universities should not be lower than 12,000 RMB. Since 2010, the difference in per student capita funding between the different provinces has decreased as some provinces greatly increased their previously low levels of funding. For example, in Sichuan province,3 the level of student funding in public universities has almost tripled from 4,100 RMB in 2009 to 12,000 since 2012 (SED, 2014), and then 14,100 in 2019 and 15,400 in 2020 (SED, 2021). As a result of these changes in public universities, teaching facilities and staff training have greatly improved. However, this increased funding only benefits public universities and so widens the financial gap between public and private universities. As students’ aspirations have shifted from merely welcoming the opportunity to attend a university, to an expectation of getting a high-quality education, this gap becomes a challenge during the development of the private university. The document published by the State Council (2014, 2015) proposes that hundreds of public bachelor’s degree-awarding universities shall now focus on vocational training. These public universities had on average been established for more than 40 years and were widely known and had strong support from state finances. As such, they are likely to become competitors of private universities, particularly in the recruitment of students, hiring staff, and provision of graduate employment. Fifth, the development of the economy and the transformation of society place different requirements than previously on the private university. China’s economy has been growing at a high speed since the policy of reform and opening-up was initiated in the 1980s. However, with the disappearance of the demographic dividend and the ageing of society, China’s economy requires further reform and adjustments to enhance long-term stable development. In order to change the structure of the economy and increase social productivity, an increase in high-quality and effective

2 3

UNESCO refers to United Nations Educational, Scientific, and Cultural Organization. The empirical data of this study is carried out in Sichuan Province.

1.1 Significance of the Study

5

supply of labour is going to be required in many industries. The private university sector with its emphasis on vocational training has, therefore, become a vital component in China’s economic and social development. The university can be seen as an institution that plays an important role in relation to promoting economic success, leading in developing an information infrastructure and qualified human resources (Fielden, 2008; Kerr & Ashcroft, 1990; Shattock, 2006). Marginson (2013) argues that universities educate people in social skills, prepare students for occupations, provide structured opportunities and social mobility, and are innovative in the capacity for, and production of, knowledge and culture. It has both a social and an economic purpose and is considered to be an essential element for the success of a society. During the development of a university, governance is the key issue to enable it to achieve its mission (Amaral, Jones et al., 2002; Kennedy, 2003). It is “at the heart of HE and universities’ abilities to serve their multiple purposes” (Austin & Jones, 2016). The World Bank (2012) emphasizes that the governance of HE is a key dimension to the health of the HE system and has a strong impact on performance. While recognizing that institutional governance is a significant element underpinning any well-performing university serving different stakeholders, this current study aims to explore the institutional governance of private universities in China.

1.1.2 Significance in Policy The significance of this research for policy can be mainly summarized from two perspectives. First, the government’s emphasis on the improvement of the governance ability of the private HE is an important strategy in tackling the current challenge in its development. As early as 2013, the theme of the Third Plenary Session of the 18th Central Committee of the CPC4 is to “Comprehensively Deepen Reform” with the overall goal of promoting the modernization of national governance systems as well as governance capacity and capability. This is a crucially important statement, as traditionally it has been at these Third Plenary Sessions where long-term policy direction is set. Xi Jinping, the Secretary of the Central Committee of CPC and the State Chair of China in his speech “To Develop a Law-based Country, Government and Society” argues: We should exercise governance and administration according to the law, develop a law-based country, government and society simultaneously, and thereby bring the rule of law to a new stage…..We should strengthen the enforcement of the Constitution and the law, and uphold the unity, dignity and authority of the socialist legal system, so that people neither want, nor are able, nor dare to break the law…All organization and individuals should act within the scope prescribed by the Constitution and the law (2014). 4

The government usually presents and ratifies the long-term policy direction at the third plenary session. This forum is, therefore, seen as being the key highpoint in the political cycle.

6

1 Introduction

Issues of governance have taken a high profile throughout the country and discussion is linked to one of the major policy directions led by Xi (2014). In 2014, the Fourth Plenary Session of the 18th Central Committee of the CPC highlighted the theme of “Using Law to Rule the Country”.5 It aims to create a system to serve the “socialist rule of law with Chinese characteristics in order to build a moderately prosperous country” (CPC Central Committee, 2014) and requires each social field to carry out adjustments and reforms. In the educational field, the commitment to extend the comprehensive reforms in education and to accelerate the modernization of the education governance system and governance ability was explicitly stated at the 2014 National Education Conference in Beijing. It emphasizes that it is both essential that processes of modernization take place and that issues of the calibre of those placed in positions of authority are attended to (Yuan, 2014). In the report of the Minister of 2014 National Educational Conference Yuan in that time, improving the governance ability of the education system is highlighted as an important strategy in adapting to the changing world and tackling the current problems in education. This particularly emphasizes that when dealing with issues relating to the governance of the private university, the focus should be on decision-making procedures and the structure of the Council, the President Accountability System, and the construction of the UCPC. Second, the pathways to improve the governance of private universities are illustrated by the government. The Outline of Education Reform and Development (State Council, 2010) points out that the private university shall improve its governance, specifically: . To establish a governing body and ensure that the President exercises their powers in accordance with the law. . To assure the management of democratic participation and supervision right of staff. . To actively play the role of the Party Committee and improve the system of steering commissioner.6 Following that document, the National Education Planning of the Twelfth Fiveyears (Ministry of Education, 2012b) places an emphasis on improving the governance system of private universities, in particular, to improve the construction of the University Constitution and governing body of the university. In the same year, The Middle and Long-term Developmental Planning of Higher Education (Ministry of Education, 2012a, b) states that the Party Committee will play a core political role in the private university and strengthen the construction of the University Constitution so as to regulate the university in accordance with the Constitution. According to the Private Education Promotion Law (National People’s Congress, 2016), private schools are classified as either profit-making or non-profit. Later, the 19th National Congress of the Communist Party (Xinhuanet, 2019) declared its intention to support 5

Following the Third Plenary Session, the theme of the fourth usually is close to the current national significant development task. 6 In Chinese: 督导专员.

1.1 Significance of the Study

7

and standardize education run by non-governmeaternt organizations, to enhance the efficiency of state governance and modernize the system and capacity of state governance, and to transform institutional advantages into governance efficiency. It planned to build a high-quality education system, become a global leader in education, and continuously improve the efficiency of national governance. This is significant for private universities to give full play to the advantages of system and mechanism to improve the efficiency of governance and the level of running. It is obvious that the challenges of governance in private universities are driven by a number of factors from both practice and policy. These include the changing expectations of students, government demands that private universities respond to social and economic circumstances, schemes for government funding arrangements for public universities, the developmental stage of private universities, and calls for efficiency and effectiveness of the university governance.

1.1.3 Significance in Academics The academic significance can be summarized with reference to three aspects. First, original empirical research on the governance of the private HE sector in China is limited. The first public study regarding the private HE sector in China was “Discussion of Private HE System” by Pan (1988). In this study, Pan mainly shows the necessity of the development of private HE. In the following fifteen years, research on private HE was few until the beginning of the twenty-first century when private HE entered a period of rapid development. Currently, there are a number of publications about private university governance. Nevertheless, as Zhong, Zhao, and Hong (2010a) point out that research across China provides detailed empirical investigation are not much as many research is descriptive. These studies provide some information about the governance of private universities, but many focus on describing the current situation through the analysis of policy documents rather than using systematic original empirical research. Second, there are some Doctoral theses which examine issues of governance in the private university sector. Wang (2012), for example, points out that private universities sometimes ignore the interests of students and the wider public, and note their strong profit-making motivations. He further observes that the structure of corporate governance needs improvement, especially to ensure that a more diverse range of stakeholders participates in formal governance roles. Zha (2010) finds that the degree of support and supervision by the government is lacking while Liu (2011) adopts the view that in the long term, the government is aiming to unify the system by means of consistent regulatory instruments. Liu notes the lack of services, incentives, and funding support for the sector. More recently, Wang (2013a, b) proposes a supervision mechanism based on tripartite cooperation of the government, society, and university, and suggests an investment compensation framework for private HE. Duan (2015) has argued that the private university sector needs to improve its internal governance, particularly in relation to the constitution of the governing body. He noted that there

8

1 Introduction

was an opportunity to better optimize the equity structure of these universities, and to establish a more rational decision-making mechanism. These studies are set in China and provide important information on the development of and challenges confronted by Chinese private universities. However, other aspects of these studies raise a number of critical concerns. For example, the studies state that the data was collected directly through interviews with informants, but not much information about the data collection is provided in the writing. In addition, the theoretical perspective employed does not always seem to be directly relevant to the data analysis. The present study analysis of private HE in China by presenting primary research, focusing on governance, and drawing on first-hand interview data in a theoretically informed manner. It will discuss the term “private” in private university and follow the development of the private university sector globally and its governance in selected countries. More important, studies written in English about private HE are limited. This literature briefly describes the basic features of the emerging provision and provides the background or legislative context of Chinese private universities. For example, Li and Morgan (2008) suggest that the stakeholders including government, nongovernmental organizations, and inter-governmental organizations should work together to build a more socially equitable private HE system in China. Wang (2013a, b) explores the causes and impact of the privatization of HE, taking the culture, socioeconomic, and the unique state-party controlling system of HE management as contextual factors. In Wang’s study, Beijing is taken as a case study to argue that in China, the growth of private HE is best viewed as a contingent adopted strategy rather than a fundamental reform of the HE sector. Hayhoe and her colleagues (Hayhoe & Li, 2011) select 12 universities to represent the range of institutional types that have come into existence since the 1990s. Their study of three private universities examines whether or not there is an emerging Chinese model for such a university. Hayhoe and Liu make the point that, The values of Chinese university leaders are based on the melding of Western traditions of university autonomy and academic freedom with Chinese values of self-mastery, social responsibility, and intellectual freedom that has taken shape over a century of modern HE development in China (2012).

Mok (2009) examines how reforming the HE system through embracing market practices enables the transition from the command economy to a market economy. He states that a new governmental regulatory mechanism that takes local administrative cultures and political circumstances into account should be developed to respond to the private HE sector more actively and appropriately. The governance of HE in China needs to be understood, as Austin and Jones (2016) propose “as an integration of post-Confucian ideals, along with strong historical and cultural tradition expressed within the logic of developing a globally competitive country”. All these studies focus on various elements of private HE in China and provide diverse perspectives to explore the development of the private university sector. Issues of governance are as much about social context and cultural norms as they are about complying with the legislation of the government. Therefore, a study to explore in detail the crucial

1.2 Research Questions and Approach

9

aspects of this developmental phase in HE in China in relation to the governance of the private university is significant and valuable.

1.2 Research Questions and Approach A key issue is that a private university in part exists in order to satisfy commercially interested shareholders who seek a certain financial return on their investment. Success in this respect is seen as one way of attracting further investors. This might differ from the government’s priority which requires private universities to deliver higher numbers of skilled and knowledgeable graduates. At the same time, other stakeholders including students and the local community wish to see the university perform well to meet their interests. Moreover, legislation concerning governance gives private universities enough space to tailor their governance to suit their own requirements and circumstances. When the different interests of stakeholders work together, factors such as different shareholders, history, and size of the university may serve to generate different institutional governance practices. While recognizing that governance is one of the elements involved in a well-performing university, this particular study seeks to understand the form of governance in practice. Therefore, the research questions are: 1 What are the key features of the form taken by institutional governance in Chinese private universities that have emerged over the past 20 years? 2 What, from the specific cases studied, are the factors that have shaped the form of institutional governance? Although each university exhibits different characteristics deriving from its history and circumstances, some elements are common to all private universities; for instance, the obligation to conform to state qualification frameworks, the need to provide qualified education to students, and the financial return aspiration of shareholders. It is possible to observe the similarities and differences in the ways in which their governance forms and processes interact with their circumstances and development. Comparing these interactions together enables the identification of the internal factors that influenced the forms of governance that have developed within a common legislative framework. The comparative case study is used in this study for two main reasons. First, the characteristics of the comparative case study are appropriate to explore the research question of this study. The essence of the case study approach is to illuminate why certain decisions were taken in certain contexts, how they were implemented, and what their result was (Schramm, 1971). Comparative case studies can offer an indepth understanding of different cases and account for their complexity, and also allow crosscutting connections across cases (Ragin, 1989). Secondly, this approach is widely used to explore the governance and management of universities in different contexts by many scholars (Braun et al., 2015; Clark, 1983, 1998, 2003; CUC, 2008;

10

1 Introduction

Mureddu Torres, 2008). These researchers have provided evidence that a comparative case study is an effective approach to explore the governance of universities. By comparing similarities and variations of selected cases, the forms of institutional governance and the factors that have shaped the governance of private universities in China will be explored. The empirical work conducted focuses on three private universities in one province in China. These universities have been established at different points in the past 20 years, and all pre-date the distinction made in current Chinese legislation between profit and non-profit universities. Together they illuminate the development of private universities within a common legislative, political, and economic framework, which enables the research questions to be addressed, but clearly limits generalization to all forms of private universities globally, which may operate in the contexts that draw a clearer line between profit and non-profit institutions and which have different histories. This will be discussed in the next chapter. The process of using a comparative case study approach, and the strengths and limitations of this approach, will be discussed in more detail in Chap. 4.

1.3 Structure of the Book In this chapter introduces the rationale for this study and the research questions. Chapter 2 presents private education in Ancient Times and the Republic of China. Private education has a long history which can be dated back to at least 500 BC when Confucius founded private schools. The section dealing with ancient times introduces the development of higher education (HE) from the Dynasty of the Western Zhou and Spring and Autumn period (770–221 BC) to the Qing Dynasties (1636– 1912). The section covering the period of the Republic of China introduces private colleges run by churches and individuals and relevant policies delivered by the central government. Chapter 3 provides an examination of the development and policy of private HE since the establishment of the People’s Republic of China. The characteristics, contributions, and funding of private universities are introduced in this chapter. Chapter 4 sets the scene for the detailed analysis of the governance of private universities in China. It begins by introducing the Communist Party of China (CPC) to the national system, and its role in the governance system of HE. This is important in understanding the unique background of the private HE sector in China. This chapter describes the structure and role of the Communist Party because any examination of private university governance requires some familiarity with the nature of the CPC and its role in the governance of educational institutions in China. Government regulation of private universities in China is also presented. Chapter 5 focuses on theoretical orientation, research design, and methodology. It begins with a discussion of the three theories of governance deployed in this thesis. Comparative case studies are employed to illustrate how private institutions adopt, adapt, and implement government regulations in line with their unique characteristics. In order to analyse the distinctiveness of the institutional governance emerging in different development phases of the universities, the interplay between evolving

References

11

government legislation and the universities is examined in the case studies, including the roles of the University Council, Executive Team, and University Communist Party Committee (UCPC) within the framework. This chapter gives the rationale for selecting the three case study universities and outlines the process of data collection. Thematic analysis is used to analyse the data and the challenges faced during the process of the research are discussed. Chapters 6, 7, and 8 construct an overall picture of how the institutional governance of the private universities studied works in practice. It presents the analysis of data from the three individual cases, with a particular focus on their different governance forms. As Brown, Tan, and Ye (2011) note, one of the contributions of research is to provide insight and analysis of ways of viewing a problem. Chapter 6 provides a description of the practice of institutional governance in Case A where the Council is separated from the Executive Team. Chapter 7 provides a description of the practice of institutional governance in Case B which the Council is combined with the Executive Team. Chapter 8 provides a description of the practice of institutional governance in Case C in which the university has a family governance structure. Chapter 9 addresses the research questions: “What are the key features of the form taken by institutional governance in Chinese private universities that have emerged over the past 20 years?” and “What, from the specific cases studied, are the factors that have shaped the form of institutional governance?” Drawing on the findings from the three private universities, the characteristics of governance in practice are discussed. The roles of shareholders, senior managers, the Council, the UCPC, and the University Constitutions are reviewed to deepen the exploration of the factors that affect the governance of private universities. This chapter also explores the way in which private universities respond to external policies and reviews the research journey and research questions before presenting the research findings and proposing practical implications for the institutional governance of Chinese private universities. The contribution to practice and to knowledge made by this study is also explored in this chapter. The limitations of the study and directions for future studies are considered before summarizing the overall argument presented in the book.

References Altbach, P. G. (2005). The private sector in Asian higher education. In P. G. Altbach & D. C. Levy (Eds), Private higher education: A global revolution. Rotterdam, Sense Publishers. 2. Amaral, A., Jones, G. A., Karseth, B. (2002). Governing higher education: comparing national perspectives. In A. Amaral, G. Jones, B. Karseth (Eds), Governing higher education: national perspectives on institutional governance (pp. 279–298). Springer Netherlands. Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: evidence from the S&P 500. Journal of Finance, 1301–1328. Austin, I., & Jones, G. A. (2016). Governance of higher education: Global perspectives, theories, and practices. Routledge. Bie, G. R. (2010). Discussion about the meaning of private mechanism for private university. Research of Higher Educaiton, 31(4), 71–77 .(In Chinese). (略论民办机制之于民办院校的意 义).

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Braun, D., Benninghoff, M., Ramuz, R., & Gorga, A. (2015). Interdependency management in universities: A case study. Studies in Higher Education., 40(10), 1829–1843. Brown, A., Tan, J., & Ye, R. (2011). What counts as evidence in evidence-informed policy and practice in vocational education and training? In Conference Paper presented at the Bundesinstitut für Berufsbildung Regional Workshop. Chen, W., Y (2008). From supplementary education to selective education - the inexorable choice of private university in China. Education Research (5), 16–20 . (In Chinese). (从补充教育走向 选择教育:我国民办高校发展的必然选择). Clark, B. R. (1983). The higher education system: Academic organization in cross-national perspective. University of California Press. Clark, B. R. (1998). Creating entrepreneurial universities: Organizational pathways of transformation. IAU and Elsevier Science Ltd. Clark, B. R. (2003). Sustaining change in universities: Continuities in case studies and concepts. Tertiary Education and Management, 9(2), 99–116. Confucius. (2006). The analects of confucius. Beijing, Zhonghua Book Company. Beijing. (In Chinese). (论语). CPC Central Committee . (2014). CPC Central Committee’s decisions of some major problems on using law to rule the country. Beijing. (In Chinese). (中共中央关于全面推进依法治国若干重 大问题的决定). CUC. (2008). Report on the implementation of key performance indicators case study experience. London. Duan, Y. (2015). Research about the core competitiveness of dynamic shareholding in private colleges in China. PhD thesis, Donghua University.(In Chinese). (引入动态股权制的中国民办 高校核心竞争力研究). Fielden, J. (2008). Global trends in university governance. Education Working Paper Series 9. General Office of the State Council. (2006). The announcement of strengthening standard management of private university and guide healthy development of private higehr education. Beijing, State Council. (In Chinese). (国务院办公厅关于加强民办高校规范管理引导民办高等教育 健康发展的通知). Hayhoe, R., Li, J., Lin, J., & Zha, Q. (2012). Portraits of 21st century Chinese universities: in the move to mass higher education. Springer Science & Business Media. Hayhoe, R., & Liu, J. (2011). China’s universities, cross-border education, and dialogue among civilizations. In Crossing borders in East Asian higher education (pp. 77–100). Springer. Kennedy, K. J. (2003). Higher education governance as a key policy issue in the 21st century. Educational Research for Policy and Practice, 2(1), 55–70. Kerr, C., & Ashcroft, J. (1990). The preservation of excellence in American higher education: The essential role of private colleges and universities. Denver, Education Commission of the States. Li, F. L., & Morgan, W. J. (2008). Private higher educaiton in China: access to quality higher education and the acquisition of labour market qualifications by low-income students. Education, Knowledge & Economy, 2(1), 27–37. Liu, S. Y. (2011). Research about regulation of the Chinese Government-Private Higher Educaiton as example. Ph.D. thesis, East China Normal University. (In Chinese). (中国政府规制研究—以 民办高等教育为例). Marginson, S. (2013). Higher education, political cultures and public good: A comparative study. In Social Research Higher Education Conference. Newport: 19. Maury, B. (2006). Family ownership and firm performance: Empirical evidence from Western European corporations. Journal of Corporate Finance, 12(2), 321–341. Ministry of Education .(2012a). The middle and long-term developmental planning of higher education. Beijing, Ministry of Education. (In Chinese). (高等教育中长期发展规划纲要). Ministry of Education. (2012b). The national education planning of the twelfth five-years. Beijing. (In Chinese). (国家教育事业发展第十二个五年规划). Ministry of Education. (2021). Education Statistics in 2020. Beijing. (In Chinese). (2020年全国教 育事业发展统计公报).

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Ministry of Education and Ministry of Finance. (2010). Opinion about further improving funding levels of the local undergraduate course of ordinary universities. Beijing, Ministry of Education. (In Chinese). (财政部教育部关于进一步提高地方普通本科高校生均拨款水平的意见) Mok, K. H. (2009). The growing importance of the privateness in education: challenges for higher education governance in China. Compare: A Journal of Comparative and International Education, 39(1), 35–49. Mok, K. H. (2016). Massification of higher education, graduate employment and social mobility in the Greater China region. British Journal of Sociology of Education, 37(1), 51–71. Mok, K. H., Wen, Z., & Dale, R. (2016). Employability and mobility in the valorisation of higher education qualifications: The experiences and reflections of Chinese students and graduates. Journal of Higher Education Policy and Management, 38(3), 264–281. Mureddu Torres, D. C. A. (2008). Values of students in higher education in Mexico: two case studies of a private and a public university. PhD thesis, Univeristy College London. National People’s Congress (2016). The Promotion Law of Private Education (Revised version). Beijing. (In Chinese). (中华人民共和国民办教育促进法修订版). Pan, M. Y. (1988). Discussion of Private Higher Education system. Research about Education Development, (3), 35–40 . (In Chinese). (关于民办高等教育体制的探讨). Ragin, C. C. (1989). The comparative method: Moving beyond qualitative and quantitative strategies. University of California Press. Schramm, W. (1971). Notes on case studies of instructional media projects, US department of health, education & welfare national institute of education. SED. (2014). Sichuan education statistical yearbook (2013). Chengdu, Sichuan Education Department . (In Chinese). (四川教育年鉴) SED. (2021). Sichuan education statistical yearbook (2020). Chengdu, Sichuan Education Department . (In Chinese). (四川教育年鉴) Shattock, M. (2006). Managing good governance in higher education. Open University Press. Shen, J. G. (2009). The strategic transformation and policy response of the development of private education. Educational Research, 8, 83–87. (In Chinese). (民办教育发展的战略转型与政策应 对). State Council. (2010). National medium and long-term education reform and development plan outline (2010–2020). Beijing. (In Chinese). (国家中长期教育改革和发展规划纲要(2010–2020 年)). State Council. (2014). Decision of accelerating the development of modern vocational education. Beijing. (In Chinese). (关于加快发展现代职业教育的决定). State Council. (2015). Guiding opinions about the transference of a local university to be able to offer applied and practical courses. Beijing. (In Chinese). (关于引导部分地方普通本科高校 向应用型转变的指导意见). Tan, H. (2013). Study of internal governance reform of university given enlarging university autonomous. Hebei Normal University Journal, 15(3), 47–52. (In Chinese). UNESCO. (2014). Government expenditure on education. (落实与扩大办学自主权背景下高校 内部治理改革研究). Wang, B. (2013a). Compensation mechanism of investment of private higher educaiton in China. Ph.D. thesis, Wuhan University of Technology. (In Chinese). (中国民办高等教育投资补偿机 制研究) Wang, L. (2013b). The road to privatization of higher education in China: a new cultural revolution? Springer Science & Business Media. Wang, Q. R. (2012). Research about strategy to improve the education quality of Private colleges: Shaanxi province as an example. Ph.D. thesis, Shaanxi Normal University. (In Chinese). (民办 高校办学水平提升策略研究) Wen, R., Liu, S., & Xiong, J. (2008). The transformation of the development and orientation of the Chinese private university. Educational Research (346), 65–68 . (In Chinese).(略论当前我国民 办高校发展定位的转型). World Bank. (2012). Benchmarking the Governance of Tertiary Education Systems. World Bank.

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Xi, J. P. (2014). The governance of China. Foreign Language Press. Xinhua News Agency. (2016). Bowen institute of Lanzhou jiaotong university publicly apologies for ‘Cancer teacher was fired’. 2016. Xinhuanet. (2019). Reports of the 19th National Congress of the Communist Party of China. Access at 6th September 2022: http://www.xinhuanet.com/politics/19cpcnc/2017-10/18/c_1121822489. html (In Chinese). (一文速览十九大报告) Xu, X. Q. (2012). Some thoughts about the construction of national levels of private colleges. Education Development Research (7), 24–27. (In Chinese). Yuan, G. R. (2014). Deepening comprehensive reform of education field and to accelerate the modernization of management ‘system and governance’ ability in education. In Minister Speech of 2014 National Educational Conference. Beijing. (In Chinese). (深化教育领域综合改革 加 快推进教育治理体系和治理能力现代化—2014年全国教育工作会议召开). Zha, M. H. (2010). Research about the selection on developmental model of Chinese private universities. Ph.D. thesis, Nankai university. (In Chinese). (中国民办高等教育发展模式选择 研究). Zhong, B. L. (2011). Several problems in the development of private education in China. Chinese Higher Education Research (7), 8–10. (In Chinese). (我国民办高等教育发展若干重要问题探 析). Zhong, B. L., Zhao, Y. S., & Hong, Y. (2009). On the status of international higher educational research and its enlightenment to China: Based on the quantitative analysis of higher education research papers of foreign periodicals. Education Research, 354(7), 14–21. (In Chinese). (国际 高等教育研究的现状及其对我国的启示—基于国外高等教育期刊的定性分析). Zhong, B. L., Zhao, Y. S., & Hong, Y. (2010a). The present situation of the international higher education research and its enlightenment to our country. Educational Research (4): 29–35. (In Chinese). (国际高等教育的研究现状及其对我国的启示) Zhong, B. L., Zhao, Y. S., Hong, Y., & Fan, Z. (2010b). Seizing the historical opportunity to resolve the deep contradiction to promote healthy development: the reform and development research of private higher education in China. Chinese Higher Education Research, 23, 11–14. (In Chinese). (抓住历史机遇 化解深层矛盾 促进健康发展——我国民办高等教育改革与发展探析). Zhou, H. T. (2014). Enhancing the vitality of non-governmental education by deepening comprehensive reform. Educational Research (12), 109–114. (In Chinese). (以深化综合改革增强民办 教育发展活力)路径与策略研究).

Chapter 2

Private Education in Ancient Times and the Republic of China

2.1 Private Education in the Period BC During the Xia Dynasty (about 2070–1600 BC), Shang Dynast (about 1600–1046 BC), and Western Zhou Dynasty (1100–771 BC), before the Spring and Autumn Period, educational institutions and schools were run by the government (Yang, 2004). At that time, government officials were schoolteachers (Wu, 1997). During the three dynasties of prosperity, subjects were taught by government officials. The contents and objectives of education include military coaching, religious education, and moral education. In order to strengthen the military strength, the rulers paid special attention to the practice of archery. Religious education centred on the worship of god and ancestors, such as learning dance and musical instruments for sacrifice or feast. That means, in the dynasties of Xia, Shang, and Zhou, a period of one thousand eightyears, the government had total control over schools. Only government officials were allowed to teach, and they also controlled what was taught. For example, to learn law, students had to be taught by an official of the law. However, not everyone could attend school. While this was relatively common for the children of princes and nobles, to find an official as a teacher was far more difficult for the children of ordinary people (Wu, 1997). In the later period of the Western Zhou Dynasty, conflicts within the ruling clique escalated, and various social conflicts intensified. In 771 BC, King You was killed, and the Western Zhou Dynasty collapsed. During the following Spring and Autumn Period (770–221 BC), Western Zhou officials gradually moved to various vassal states to seek their future. At the same time, these vassal states and their officials needed to cultivate talented men to help them expand their spheres of influence, which led to the emergence of the scholar class. The recruitment of scholars became an urgent demand of vassal states and nobles at that time and books collected by the royal family and government began to be made accessible to aristocrats and scholars from other countries. As the academic centre moved down and out from the government, the previous pattern of officials jealously guarding classic books was © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_2

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gradually broken. Private schools flourished and learning was no longer confined to government departments. Various schools of thought emerged in the ranks of scholars, representing the interests of different classes and each school propagandized their ideas to the vassal states, hoping to be adopted and to expand their political influence. Private education has a long history in China. Ancient private education (私学) took place, not under the auspices of the government or as part of the national school system but was presided over and managed by individuals or private groups. This took the form of private lecturing in various circles, private school of thought (学派) with a particular academic master as the head, and private schools in fixed locations. During this period, transportation and communication were underdeveloped, and private schools had no fixed locations. Rather, in order to try and spread their doctrines to political groups and the public, schools of thought travelled to various places to give lectures and attract disciples. Those which managed to persuade political groups to use their doctrines to govern the country saw an enhancement in their academic influence. Students of different ages and social status attended private schools, including children and adults, government officials, business people, and ordinary people. The Spring and Autumn Period (770–221 BC) was a time of great social upheaval and transformation in China. As the central government declined and local forces rose in power, political conflicts and wars among the previous vassal states were common. Political groups competed to attract scholars familiar with the traditional ‘Six Arts’1 and etiquette for all situations to their causes to consolidate their power. Thus, the phenomenon of people competing to engage in the profession of scholar appeared which further fostered the development of private teaching and learning. In the Spring and Autumn Period, establishing private schools and/or carrying out private lecturing activities were essential for thinkers to spread their ideas. This flexibility of private education advanced the growth in new academic ideas. The emergence and development of private schools is a significant event in the educational system (Sun, 2000). The various schools of thought and their exponents begun in this period went on to flourish in the Warring States Period. Every founder of a private education institution was a philosopher. Their thoughts included specific political guidance which revolve around how to establish and consolidate political power by engaging in debates. They defended and spread their ideas and writings as far as possible. These philosophers in different schools fought for influence with each other. They enriched their academic thoughts and promoted their ideological influence range through educational practice activities. During the Spring and Autumn Period, some private educational institutions and schools integrated their ideas and practices of national governance, with Confucianism, Monism, Taoism, and Legalism having the largest influences. Confucius and Mencius, two of the founders of Chinese traditional culture, encouraged good scholars to become officials and said that education should be provided for all without 1

The Six Arts formed the basis of education in ancient Chinese culture. They were rites, music, archery, chariotry, calligraphy, and mathematics.

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discrimination. This philosophy later had a profound impact on Chinese culture. Their ideas are also known as the Ways of Confucius and Mencius. In the Warring States Period (475–221 BC), the seven states of Qin, Qi, Chu, Yan, Han, Zhao, and Wei contended for supremacy. There was no fixed relationship between states or between the king of each state and scholars. Thus, states’ relationships were in a fairly constant state of flux in different periods, and it was common for scholars to serve different kings at different times. As scholars became increasingly highly valued, the trend of cultivating them increased. Private teaching and learning flourished, and a hundred schools of competing thought emerged. During this period, Confucianism, Mohism, Taoism, and Legalism all established fixed teaching centres, of which the private school of Confucianism was the largest. The princes of the Spring and Autumn and Warring States periods needed to consolidate their political power and hoped to analyse the gains and losses of state administration and the ruling experience from different perspectives. Each vassal state encouraged academic freedom, and scholars were free to lecture, write books and talk about political affairs at will (Sun, 2000). Various viewpoints coexisted, and tit-for-tat debates occurred from time to time. The rulers of the time adopted whichever ideas supported their own needs. In this environment of academic freedom, scholars actively innovated and the writing and literature of various schools and thought sprang up like mushrooms. At the end of the Warring States Period, Qin conquered the six other states and became the first unified dynasty in ancient China. The Qin Dynasty (221–207 BC) initiated the imperial system and maintained national unity with a centralized system, adopting legalism as the ruling philosophy. Legalists attach great importance to the rule of law, emphasizing autocratic monarchy, severe punishment, and law as the mandatory tools of social rule. Emperor Qin Shi Huang2 believed that private schools would threaten the rule of his dynasty by encouraging free thought and so, in order to control public opinion and stifle people’s ideas, the Qin Dynasty banned private schools; they were replaced by the education system of law as teaching and officials as teachers (Guo, 2008; Shi, 2011). In 213 BC, Emperor Qin took the advice of Li Si, his prime minister, and burned all the history books of the states except Qin to further stifle discord and any private discussions of theories of the state. Only practical books related to people’s daily life such as medicine, divination and crop cultivation were allowed to be kept. In the early years of the Western Han Dynasty, the teaching and learning of the Five Classics of Confucianism was widespread and the Confucian school of thought became influential in the states of Qi, Lu, Yan, and Zhao. Emperor Wudi accepted a suggestion by Dong Zhongshu, a philosopher and politician, to establish a cultural and educational policy of dethroning other schools of thought and respecting Confucianism only and treating education as the foundation of governing the country (Wei, 2003). Confucianism attaches great importance to the social role of education. By then, Confucianism having developed since the Spring and Autumn Period, had integrated Taoism and some other schools of thought, emphasized the autocratic 2

Founder of the Qin Dynasty, and the first emperor of a unified China.

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monarchy, maintained the feudal ruling order, and was highly respected by rulers (Guo, 2008). In the Han Dynasty, the official school of thought and education developed rapidly. However, there was only a single imperial college with a limited student quota which meant that only a limited number of officials could attend. One result of this was that the practice of Confucian scholars lecturing was revived. Many masters and scholars who were not politically successful or who did not want to be involved in the internal affairs of the ruling group withdrew from public service and lectured only their disciples. Thus, private schools flourished once again, benefiting from government support and the public’s thirst for knowledge. Jingshe were fixed places for private education in the Han Dynasty and functioned like institutes today. Some were set up in the homes of the teachers. Jingshe were not only places of instruction, but they also had collections of books (Yu, 1993). During this period, Confucianism dominated education. Some private Confucian classics teachers became very famous, and many people wanted to become their students; others, whose obligations meant that they were time-pressured, only approached scholars to ask advice when they had questions. However, by writing their names on the master’s students list, they were accepted as listed disciples (著录弟子). Students who went to a fixed place (whether the scholar’s home or elsewhere) to study, listen to lectures, and discuss scriptures and doctrines were known as jimen disciples (及 门弟子) which means students directly taught by masters. For example, Cai Xuan, an outstanding scholar and teacher, had thousands of jimen disciples and tens of thousands of listed disciples (Li, 1993).

2.2 Private Education in the Period AD 2.2.1 The Sui, Tang, and Song Dynasties Private schools in the Sui (581–618 AD) and Tang dynasties (618–907 AD) coexisted with official schools and there were no restrictions on what private schools could teach. Many scholars and celebrities engaged in educational activities to recruit students and delivered lectures while serving as officials in the government. The growth in private schools during these two dynasties was fostered by government support, the public’s hunger for culture in the time of peace, private education as a source of preparation for the imperial examination3 and the schools’ flexibility (Lin, 1999). During the Sui and Tang dynasties, private schools were characterized by 3

The imperial examination was formally instituted in the Sui and Tang Dynasties. Students studied for fame, and when it was time for the imperial examination, students flocked to take it. After the Opium War, the imperial examination system was constantly criticized. The existence of the imperial examination system inevitably hindered the development of schools. The Qing government ordered the end of imperial examinations in August 1905. At this point, after 1300 years, Chinese education began to enter a new stage of development.

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diversified levels, flexible schooling, simple institutions, diverse forms, rich content, and comprehensive coverage. Private and official schools in these two dynasties complemented and influenced each other, and together constituted a complete feudal education system (Sun, 2000). The Sui Dynasty instituted the imperial examination as a way of selecting its government officials from among intellectuals throughout the country and, during this period, private education was the primary way students prepared for the imperial examination. Once the Tang Dynasty had been established, Taoism flourished, and every Taoist temple was also a Taoist school. Confucians organized private schools in the form of families and disciples, and academies also emerged during this period. Academies were private buildings built outside the cities to provide a quiet environment for scholars to study. Independent of government regulation, academies were dedicated to the pursuit of knowledge and the encouragement of free discussion of the classics (Hayhoe, Li, Lin, & Zha, 2012). There were two types of academies: one which collected books and a second where individuals read and studied. At the end of the Tang Dynasty, the number of official schools declined. Under the influence of the Buddhist monasteries, the academies started to teach students and lecture, becoming established as a new form of educational organization. Private schools in the Tang Dynasty were flexible in selecting school sites and teachers, and the number of students they accepted. In the following Song Dynasty (960–1279 AD), the academy prospered as an educational system (Sun, 2000). In academies, scholars discussed philosophical and political issues and studied the classics, using books collected from all over the country. Famous academies included Yuelu (岳麓书院), Suiyang (睢阳书院), Songyang (嵩阳书院) and White Deer Cave (白鹿洞书院) (Lin, 1999). Yuelu Academy was founded in 976 and is now part of Hunan University. Suiyang Academy was established in 1009 and is today known as the Social Science Popularization Base of Henan Province. Songyang Academy was established in 1035, made a national key cultural relic in 2001 and listed as a World Cultural Heritage Site in 2010. White Deer Cave Academy was founded during the Tang Dynasty in 940 but flourished in the Song Dynasty. It was listed as a national key cultural relic in 1988 and a World Heritage Cultural Landscape in 1996. The Song Dynasty4 encouraged the establishment of academies. In Song Dynasty, the rulers paid great importance to promote culture and education. At first, these rulers were only focused on the imperial examinations. Thus, the academies grew in influence. At that time, the social environment was stable, providing ideal conditions for academy development. As an educational institution, the academy was the highest form of private school in ancient China. Academies attached great importance to academic development and aimed to explore the knowledge of sages, encouraging students to cultivate their morality and they were trained to help running the country. Academy rules for students took the form of learning rules and covenants: they listed the direction of learning and 4

The Song Dynasty was divided into the Northern Song and Southern Song. The Northern Song was from 960 to 1127 and the Southern Song from 1127 to 1279.

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the efforts to be in terms of moral cultivation. More and more masters of various schools talked about their academic ideas and actively established academies and the development of academies reached its peak. In the early Song Dynasty, a number of influential academies appeared. These academies were continually praised by the State which had a tremendous social influence and increased their fame. The development of academies in the Southern Song Dynasty was closely related to Zhu Xi’s5 suggestion to the Imperial Court to develop and be responsible for the White Deer Cave Academy. He was then appointed as the head of the academy and formulated the ‘Rules of White Deer Cave Academy’. This was the first complete and systematic set of rules for an academy in Chinese history (Sun, 2000). The establishment of the academies of the Southern Song Dynasty as an educational system promoted the development of Neo-Confucianism and the prosperity of academic culture.

2.2.2 The Yuan, Ming, and Qing Dynasties The Yuan Dynasty (1271–1368 AD) took control of all the private academies and made them preparatory schools for imperial examinations (Wang, 1998). It took a protective attitude towards the academies and encouraged the founding of new ones until there were over 400 in total. However, as the government strengthened its control, the academies gradually lost their original intention of focusing on academic self-improvement in favour of fame and wealth. Yuan Dynasty academies were characterized by their use of Confucian scriptures and works of Neo-Confucianists6 as teaching materials, as well as other disciplines, such as medicine, mathematics, calligraphy, and Mongolian calligraphy. The academies of the Song and Yuan dynasties played a positive role in developing culture, education, and Neo-Confucianism. During the Ming Dynasty (1368–1644), scholars only discussed political issues in the academies. The academies were popular in the middle of the Ming Dynasty. Donglin Academy (东林书院) in Jiangsu Province had a high reputation and broad influence among these academies. It was initially the lecture place of NeoConfucianist Yang Shi in the Northern Song Dynasty and was established as a place for lecturing of the ‘Donglin School of Thought’. It later published the ‘Convention of Donglin Academy’ in imitation of the ‘Rules of the White Deer Cave Academy’, making Donglin Academy a cultural and academic centre. In China, the seminar system was a popular form of learning in academies whose focus was for scholars to discuss and debate subjects. Academy lecturing activities originated during the Southern Song Dynasty, and gradually became institutionalized 5

A Confucian scholar, philosopher, and government official. Neo-Confucianism is a moral and metaphysical philosophy influenced by Confucianism. It originated in the Tang Dynasty and became influential in the Song and Ming dynasties. In the Yuan dynasty, scholars and officials restored and preserved neo-Confucianism to safeguard the cultural heritage of China.

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in the Ming Dynasty, closely connecting academy lecturing and politics. The Donglin Academy lectures were outstanding representatives of the lecture system of Ming academies. In order to deliver lectures smoothly, the Academy gradually formed a set of rules, the most famous of which is the ‘Donglin Meeting Appointment’ which required lectures to be held regularly and hosts elected. On the day of the lecture, a grand ceremony was held, and ‘Four Books’ (四书). The Four Books are the authoritative books of Confucianism and the most important classic texts. The Four Books are Great Learning, Doctrine of the Mean, Analects, and Mencius. Other important authoritative books of Confucianism called Five Classics (五经) are Classics of Poetry, Book of Documents, Book of Rites, the I Ching or Book of Changes, and the Spring and Autumn Annals. During the lecture, participants were supposed to listen to each other with an open mind and, after the lecture, discuss it with each other. Specific provisions were also made for breaks and refreshments, and the seminar was thoroughly institutionalized. Another characteristic of Donglin Academy was that it paid close attention to social politics and closely combined lectures with political struggles. The founder of Donglin Academy, Gu, described the tone of the Academy as “In ears are the sounds of wind, rain and reading; In heart are the affairs of households, country and the masses” (Sun, 2000). The lectures held by Donglin Academy were supported by many scholars and a group of incumbent officials. This formed a political force against the noble landlords and their followers. Donglin Academy was not only the centre of education and academic activities of the Donglin School, but also became a political force and creator of public opinion. By the time of the Qing Dynasty (1636–1912), there were over 7,000 academies, many of them devoted to students preparing for the imperial examinations. However, a new feature appeared in academies in the Qing Dynasty, that is, the combination of teaching and research, which took the same shape as a modern western research university. For example, Gujin Jingshe was established by the scholar Ruan who was also the governor of Zhejiang. He promoted Confucianism and founded Xue Hai Tang in Guangzhou in 1824 based on his experience with Gujin Jingshe. Gujin Jingshe and Xue Hai Tang are both still in existence as important cultural and academic research centres. Ruan adhered to the premise that education is about learning and virtue, not fame, and offered courses in mathematics, astronomy and geography, and implemented the principle of teaching students according to their aptitude and using their strengths. In addition, the academies published the research results of teachers and students. Both colleges organized collaborations between teachers and students to write books, and students also engaged in independent writing. These books were both research results and reference books, promoting college teaching and research activities. Later, due to the impact of the social division of labour caused by the development of capitalist industry and commerce in the seventeenth century and the demand for science and technology and practical talents, pragmatic education became more important. Starting from utilitarianism, the main goal of the academy became the training of practical talents.

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Zhangnan Academy was founded by Yan Yuan, a famous educational thinker who opposed the Neo-Confucianism of the Song and Ming dynasties. He set up subjects of literary affairs, martial arts, classics and history, and arts to cultivate talents. This kind of training goal was not only a great change from the previous feudal society one which emphasis passing the imperial exam, but it had the distinct characteristic of being practical, reflected the new needs of the emerging citizen class to develop social knowledge through talented people, and had a positive significance at that time. During the Reform Movement of 1898, academies were abolished and redeveloped into universities, middle schools, public libraries, and museums. Academies began in the Tang Dynasty, flourished in the Song Dynasty, and continued throughout the Yuan, Ming, and Qing dynasties, lasting more than a thousand years. After the Tang and Song dynasties, with the strengthening of the imperial examination system and the increase in the number of scholars, many who failed the imperial examination chose to make a living by teaching and became the main source of teachers for private schools, especially for private education. Unlike official schools, private schools in ancient China created opportunities for citizens to access higher education. As Hayhoe et al. (2012) pointed out, private higher education in ancient China illustrated the dual-track development of government control and local decentralization.

2.3 Private Higher Education in the Republic of China7 2.3.1 Private Institutions Run by Churches Private schools in the late Qing Dynasty were divided into two main categories according to their founders: church schools founded by foreign missionaries, and private schools run by Chinese people. Church schools were established and funded by various church groups from Europe and America and so were not subject to the authority of the various education departments of the state. They also differed from the education system prescribed by the state in terms of the national school system. It was not until the establishment of the Nanjing National Government8 in 1927 that church schools were required to register with the government before being incorporated into the country’s education system (Zhang, 1997). As early as the sixteenth century, foreign missionaries had begun to establish schools in China. In 1555, for example, the Portuguese Jesuit Ballado founded St. Paul’s College in Macau (Ryan, 1965). In 1836, British businessmen William Jardine and Lancelot Dent set up the Morrison Education Association in Hong Kong. William and Lancelot provided a grant of £15 monthly to recruit and accommodate students who were in the school organized by Karl Friedrich August Gützlaf and his wife and 7 8

The Republic of China ran from 1912 to 1949. The Nanjing National Government was in power from 18 April 1927 to 20 May 1948.

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these students were taught in the school for preparing to study in Morrison School (Zhang, 1997). In 1839, the couple worked with the American missionary Samuel Robbins Brown to organize China’s first western-style school, the Morrison School in Macau (Marong, 2020). From the 1830s onwards, church schools were established in Xiamen, Guangzhou, Fuzhou, Suzhou, Shanghai, Beijing, and other places to spread western religious ideas. In the last decades of the Qing Dynasty, the Qing government gradually realized the gap between traditional Chinese education and western education, especially in science and technology. The government adopted a series of educational innovation measures. First, it advocated the idea of learning from foreigners in order to compete with them, and promoted Confucianism as the source of values, and western learning for practical applications (Zhang, 1998). The government set up new schools to train students as talents for foreign and military affairs after they graduated. These newstyle schools had the following characteristics. First, they were specially designed to train translators and generalists, and specialized in cultivating foreign affairs talents, instead of training bureaucratic reserve forces to prepare for imperial examinations. Second, it focused on western languages and art like paintings and sculpture, etc. rather than asking students to read traditional Confucian classics and learning how to write stereotypical essays. Third, the western teaching system was adopted, and the annual course and class teaching system was implemented. As well as teaching foreign languages in particular English, these new schools ran a series of natural science courses such as physics and chemistry. For the first time, science was officially included in the Chinese education system, and education had taken an important step forward. In 1902 and 1904, the government formulated the Renyin and Guimao School Systems, based on the western education system. These were the first nationwide systematic school systems formulated in the name of the government in the history of modern Chinese education. In 1902, the Articles of the Imperial Academy specifically stipulated the nature, training objectives, admission requirements, school years, and curriculum settings of all types of schools at all levels. This year was the Year of Renyin (壬寅) in the Chinese traditional calendar, so this school system is known as the Renyin School System and it included a series of school system documents. In 1903, the Regulations of the School, which stipulated the school system, were drafted, and then promulgated and implemented in 1904. In addition to formulating various statutes at all levels of schools, it formulated a school management law and a teaching law. As 1903 was the Year of Guimao (癸卯) in the Chinese traditional calendar, this school system became known as the Guimao School System (Sun, 2000). It was a national statutory education system promulgated by the central government and implemented for the first time in modern China. The Qing government encouraged the private sector to donate funds to support schools, but explicitly stipulated that the scope of private schools should be limited to primary and secondary education. However, foreign missionaries, protected by treaties, were able to set up private church universities in concessions and trade ports and even in China, all of which were not subject to the control of the Qing government (Sun, 2000).

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With China’s defeats in the Second Opium War (1856–1860), the Sino-French War (1884–1885), the First Sino-Japanese War (1894–1895), the Eight-Nation Coalition War (1900–1901), and various others, hundreds of treaties covering areas from customs rights and consular jurisdiction to inland navigation and mining rights were signed. China was losing its sovereignty step by step. These treaties also protected missionaries who wanted to open church schools in missionary missions in China. Before the Nanjing National Government was established in 1927, the state did not have a consistent policy on mission schools, nor was there any substantial management or regulation. New schools were established throughout the country in the late Qing Dynasty which was ended in 1912, and church education at all levels entered China. In that time, there was no regulations relevant to the establishment of schools for foreigners, nor did it require such schools to register with the government. This made it easy for foreign religion to set up church schools throughout China. By the beginning of the twentieth century, 35 churches in China had opened thousands of primary and secondary schools throughout the country (Ding & Zheng, 2000). According to Ding and Zheng, the key purpose of early church schools was to train devout missionary assistants, as well as clergy who could carry out missionary work independently, to expand their ranks, use Chinese people to spread western religious ideas, and increase their religious influence. When the first church schools were established, western missionaries did not realize the importance of developing higher education and instead set their goals on primary and middle education. They soon discovered that the results of such primary and secondary education were far from what they had expected. The students who attended the schools run by the church were the children of low-income families who were attracted by the free tuition, food and lodging, or homeless street children; such people were highly unlikely to go on to have a substantial impact on Chinese society. Gradually, the missionaries realized that only by developing HE could they win over the intellectual class and upper echelons of Chinese society and that the goal of running a school should not be limited to the training of devout believers and missionary assistants. Rather, it should be to help Chinese youth get a literary, scientific and professional education, train successful and influential Christians, and assist educated Christian priests, teachers and doctors to become influential leaders in Chinese society and rely on their social influence to expand the spread of religion. Therefore, they began to concentrate on the development of higher education, and strived to improve the level of schools, to ensure the quality of teaching. When the Republic of China was founded in 1912, there were only four universities in the country other than the church universities (Jin, 2000). In 1912, the government held the first National Conference on Industry and Commerce, summarized the experience of setting up domestic industries, and put forward a variety of policy requirements on behalf of the bourgeoisie. Since then, the central government has consistently promulgated a series of new economic regulations to promote the development of China’s capitalist economy (Zhu & Gao, 1990). With the rapid development of capitalist industrial enterprises, the contradiction between talent demand and talent supply was sharp.

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From 1912 to 1922, the demand for talent by a considerable number of original enterprises became increasingly urgent (Xu, 1995) and the gap between the demand brought about by the rapid development of China’s economy and the shortage of talent provided by public universities provided much space for the development of church universities. The original church secondary schools which had been upgraded or achieved merged had formed 14 church universities in 1922 (Jin, 2000). During this period, church universities attached great importance to the natural sciences, and most of the university curricula included Chinese literature, English, mathematics, science, religion, and history and philosophy, while some offered professional and vocational courses, such as medicine, education, or engineering (Zhang, 1997) with only a smattering of courses in law, agronomy, or business management. Church university graduates were generally employed in one of five areas. First, as a priest or engaged in other missionary work, usually undertaken by children of Chinese believers; second, as teachers in one of the many new schools, whether church or state; third, as comprador or business clerk in banks, post offices, companies, and tax departments; fourth, in business, medicine or entrepreneurship; and fifth, going abroad for further study (Gao & Huang, 2007). Tan (1989) pointed out that after the twentieth century, missionaries from all over the world made church universities in China the focus of their work. In these years China had faced a national crisis of falling apart and Chinese youths were eager to learn from the West how to develop a powerful country. This is one of the reasons why the churches university can develop in China (Xu & Zhang, 1996). The churches from other counties used the establishment of church universities as an alternative to missions, as they objectively met the educational and cultural needs of China’s modernization process. This resulted in church universities becoming pioneers of the Chinese new-style education and a medium of western communication. Zhang (1997) suggested that church universities showed development and change in their political, religious and educational functions in different periods of development. They were initially founded to disseminate western culture and Christian teachings, but later, especially after they formally registered with the Chinese government, the principle of separation of religion and education was mainly applied (Zhang, 1996). In their actual operation, church universities’ role shifted from spreading the gospel to focusing on secular education, thus laying a solid foundation for their survival in China and gaining the momentum of continuous development (Zhang, 1998). Church universities were not only the product of the infiltration of Chinese culture by western countries, but also the result of the emergence and development of the modern western educational model in China (Zhang, 1991). They adapted to the historical requirements of China’s social and economic modernization. Their most direct contribution was to introduce modern western education to China, spread the knowledge system of western industrial civilization, provide a model for China’s transition from traditional to modern education, and shorten the time it took for China to complete this transformation (Gu, Lin, & Wu, 1994; Wu, 1994). Church schools directly introduced western educational models, teaching plans, curricula, methods and even regulations and systems to China. They have had a profound impact on

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Chinese education and society, and promoted the abolition of traditional Chinese education systems and the establishment of new school systems. The role of church universities in the modernization of Chinese education had three main effects (Central Institute of Educational Science, 1988). First, they impacted the old-style education in China, resulting in the introduction of the new education style; second, they introduced the educational thoughts of western scholars represented by John Dewey; and third, the teaching of different subjects supplanted the narrowness, one-sidedness, and mystery of old-style education in China. Following the example of western universities, church universities promoted the early modernization of China’s higher education management model in terms of school management system, faculty structure, and discipline set (Roderick, 1998). Church universities built a bridge between Chinese and western cultures, as a social and cultural phenomenon marrying Christian and Chinese culture. Over time, there have been fairly significant changes in the composition of the funding sources of church universities. Initially, the majority of funding came from parent church organizations but, increasingly universities came to mainly rely on donations from home and abroad as the amount of church grants declined, and the proportion of social donations continues to increase (Ding & Zheng, 2000). Before 1911, students attending church universities did not have to pay tuition fees. The church was solely responsible for all funding necessary for the university, including construction of classrooms, dormitories for students and staff, libraries and science laboratories, daily expenses, and supply of and salaries for teachers (Li, 1997). With the expansion of the universities and growth in different religious affairs of the church, the maintenance of the universities gradually became a more significant burden on the church. These church universities began to assume part of the funding responsibility. By the 1920s, church universities had three main sources of funding: the church, including fixed education contributions; donations from Chinese and foreign believers and alumni; and subsidies from various consortia and foundations. During this period, the importance of donations became apparent, and church universities began to charge a considerable amount for tuition fees. Therefore, the income from tuition fees paid by students played a role in the economic resources of church universities. When early church universities were first established, they relied on church grants and donations to acquire land made available by unequal treaties, and opening and running hospitals, factories and farms which also provided a certain amount of funding. After registering with the Chinese government, the religious function of church universities was greatly weakened. As a result, the parent churches gradually stopped allocating funds, and the funding structure of church universities formed a more stable model, i.e., mainly reliant on donations and tuition fees, supplemented by multi-channel sources of funding such as miscellaneous income and subsidies from the Chinese government.

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2.3.2 Private Institutions Run by Individuals In 1912, Cai Yuanpei9 drafted and published the University Order for the Ministry of Education. This covered the establishment of university departments, student qualifications, granting degrees for the graduates, the recruitment of teachers, university councils, the terms of reference of the Association of Professors, and stated that all provisions applied to private universities including church universities. In 1913, the Regulations on Private Universities were promulgated, providing a legal basis for private or group organizations in China to set up private universities, and since then, successive governments have basically treated public and private higher education equally (Chen, 2002). The Regulations laid out the requirements regarding material equipment and teacher qualifications to ensure the conditions and teaching quality of private universities. In the same year, the Private University Registration Measures Notice was promulgated, requiring all private universities to register with the government following the new procedures regulated by the document (Xiong, 1990). This year, the private Beijing National University and Minder University were established, and this set off a boom in establishing of private universities (Tan, 1995). In 1924, the number of private universities in Beijing and Shanghai grew rapidly. However, this sharp increase in numbers was not accompanied by an increase in the quality of teaching, because teachers, funds, teaching materials, equipment, and other conditions could not keep pace; thus, the quality of the newly established private universities was uneven. In 1925, there were 30 registered private universities in China and 26 public universities, and a further 14 church universities had not registered with the government (Wang, 1997). At that time, the requirement for private universities to register was not strictly enforced, which was an important reason for the increase in private universities. In 1925, the government promulgated the Regulations on the Accreditation of Private Specialized Schools, which include private universities to register in the government. And with that, the number of private universities went into reverse and by 1927, there were only 21 registered private universities (Zhang, 1991). Although, in general, private universities were funded mainly by donations and tuition fees, different universities had different sources. Private sources can be divided into the following three categories. In the first category, the main source of funding was donations. This included the Sino-French University, Xiamen University, Yanjing University, and Lingnan University. The second category was mainly funded by tuition fees. This included Guangdong National University, Dongwu University, and Hujiang University. The third category was funded by a mix of tuition fees and donations. This included Guanghua University and Jinling University. Regardless of the funding type of private university, they were all self-financing, and thus had enough autonomy in the management and use of funds. Private university donations came from several sources, one of which was contributions from board members of the universities. The board of directors is responsible 9

Cai was a Chinese philosopher and politician. He was the president of Peking University, and founder of the Academia Sinica.

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for the selection of the president, the audit of the annual budget final accounts, financial custody, and supervision. Many private university board members at that time held their post because of their donations but did not participate in any management affairs while they had effectively bought their way onto the board (Chen, 2002). Second, donations came from foreign groups and individuals, such as the Rockefeller Foundation, the Pacific International Society, and the Hull Foundation while private university presidents often went to the Northern America, Southeast Asia, and other places to solicit and collect donations; Third are domestic industry patriotic donations, such as from Chen Jiaxuan, who funded Daxia University for decades (Li, 1997). As noted above, these private universities had absolute control and oversight over the funds that they raised. In terms of the amount of funds received, public universities managed by the government received more funding than private universities. Public universities rely on government for most of their funding but controlled by the government in which their teaching and scientific research was often affected by the government. Financial autonomy allows private universities to use their funds to deal with the most pressing issues for their development, such as the introduction of new courses tailored to the needs of the times and the development of unique research projects. After the founding of the Republic of China in 1912, the central and local education authorities supported the development of private schools but managed them strictly. Decrees of the central government during this period allowed individuals and private groups to set up schools at their own expense. For example, as mentioned in the university decree issued in 1912, individuals could set up universities (Zhu & Gao, 1990), lifting the late Qing Dynasty ban on individuals establishing private universities. In addition, the Republic of China issued several further regulations, establishing the authority of education authorities at different levels to supervise and manage private schools. The central and local governments have adopted incentive policies for individuals who donated money. For example, the Beijing Education Bureau published documents to encourage individuals to establish schools with private wealth as well as implementing a subsidy system for private schools and paid public grants to qualified private schools (Chen, 1979). Also, the central government promulgated a number of legal regulations and policy measures for the development of private universities. It allowed private or donated funds to be used to set up private universities, but also required private universities to register with the government education administration to facilitate their management and supervision. In 1925, the government promulgated the Measures for Approval of Requests for the Establishment of Schools by Donations from Foreigners. The main contents were as follows: (1) foreigners must abide by Chinese laws and regulations when running schools in China; (2) mission schools must be headed by Chinese citizens; (3) Chinese members should be the majority on the school board; (4) course standards set by the schools shall be reviewed by the government (Zhang, 1998). In 1927, the education authorities strengthened the management and supervision of private universities, established clear standards for their financing and equipment,

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formulated more comprehensive regulations for their management and strictly implemented them, and effectively banned those that did not conform to these requirements. In 1929, the Organic Law of Universities and the Regulations of Universities were promulgated, both strictly stipulated the standards for the establishment of universities. The central government promulgated the Private School Regulations in 1929, which was revised in 1933, 1943, and 1947 (Sun, 2000). This document also applies to universities. These covered the rights and duties of private schools, education authorities’ management powers over them, the composition of private school boards, clarified the relationship between the education authorities and private schools, and strengthened the supervision and management of private schools, in order to ensure their quality. These laws and regulations were strictly implemented throughout the country, promoting the scientific and standardized development of private schools in modern China.

2.3.3 Features of Private Higher Education in the Republic of China From 1927 onwards, in an attempt order to consolidate its power, the Kuomintang adopted a series of fiscal policies and measures, such as unifying the fiscal system, striving for tariff autonomy and currency reform, establishing a bureaucratic monopoly capital financial system, and formulating many policies and measures to develop the national economy, all of which opened the way for the development of capitalism (Zhang, 1997). From 1927 to 1937, Chinese society was relatively stable and the country’s economic growth, especially the capitalist industrial economy, was rapid and this economic development provided a sound economic foundation for the development of education. The numbers of private universities increased and the level of scientific research, school sizes, and teaching quality greatly improved. Church universities usually had a management committee in China and a board of directors in their ‘home’ western country, whose members were appointed by their church. Although the university’s faculty occasionally elected representatives to the management committee, they were few and had little influence. Boards of directors set up in western countries held the real power, including holding the property rights of universities, being responsible for fund-raising and controlling the use of these funds, and the approval, appointment, and removal of Chinese faculty members. The management committees located in China, on the other hand, were usually composed of presidents, university administrators, representatives of regional churches, and relevant personnel among diplomats, whose duties were to supervise the university, appoint administrators, draft annual budgets, the approval of courses and the management of other matters requiring attention. This administrative structure was conducive to the churches’ complete control of China’s church universities so that it served their religious mission.

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After the compulsory registration of private universities was brought in by the Chinese government, the western boards of trustees were abolished, and the Chinese management committees became the highest authority. The principal was appointed by the board of directors, acting for the university council to handle its affairs. A number of departments in the university make up the management body under the leadership of the president. Compared with public universities, the biggest difference in the management system of private universities was the way in which the president of the universities was appointed. Presidents of public universities were appointed by the government, while those of private universities were hired by the board of directors to manage the affairs of the universities on their behalf. Since they were appointed by the executive branch, the presidents of public universities always had to follow government policies. The government had strict control over many aspects of public universities including the curriculum, enrolment, hiring of lecturers, and student activities. The presidents of private universities, employed by the board of directors, had more autonomy over the internal management and the board of directors usually did’t participate in the administration of the university. Many private university presidents were also the founders of the establishments and so were indisputable candidates for the presidency. The role of the board of directors was more reflected in the fund-raising. The president was essentially the university’s sole head (Wu, 1994). The Professors’ Association had the most authority in public universities, but for private universities it was the Board of Trustees. In fact, the Professors’ Association in public universities had the power to decide on routine teaching tasks such as the examination and teaching outlines, whereas the political power relating to educational policy, funding, construction equipment, was basically in the hands of the Council headed by the President (Tsinghua University School History Writing Group, 1981). Several factors influenced the emergence and gradual development and prosperity of private universities in these time in China. First, the development of the industrial economy was an objective condition for the survival and development of private universities. China had been industrializing since the First Opium War.10 In addition to the rapid expansion of foreign capital forces, China’s original capitalist factors had also been stimulated and rapidly developed. Starting from the foreign affairs movement, whether the capital was provided by western powers, government bureaucrats, or the national bourgeoisie, China’s industrial and mining enterprises, begun from scratch, gradually increased to large-scale operations, increasing the domestic demand for a new industrial labour force. This, in turn, fuelled the need for educational provision to provide more talented people to meet the needs of the labour market. However, with the political situation in turmoil companying wars, it was difficult for the government to pay great attention to develop HE, leaving a broad space for private universities to develop. 10

There were two Opium Wars. The first was fought between Qing China and the United Kingdom in 1839–1842, triggered by the campaign against the British merchants who sold opium in China. The second was fought between the Qing and the United Kingdom and France in 1856–1860.

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Second, compared with public universities, the inner vitality of private universities was more robust. Private universities did not rely on the government for funding, and management was free from government interference and control. Thus, private universities were free to adapt their educational offerings in response to the market and as they saw fit. Third, the government’s macro-management, supervision, and support was an important guarantee for the healthy development of private universities. Since the establishment of the Republic of China, despite frequent changes of government, one particular governmental attitude towards private universities remained constant: the law guaranteed that registered private universities and public universities enjoyed equal status, and that their graduates were treated equally in the job market. Private universities had had a period of disorderly development when the rapid increase in their numbers led to an overall decline in teaching quality. Before the establishment of the Nanjing National Government in 1927, previous governments’ lax supervision of the management of private universities had led to a period of proliferation but not quality. The improvement in the quality of private universities was key to obtaining social recognition. The Nanjing National Government stipulated criteria for the establishment and continued running of private universities, and all those who could not meet them either closed or were asked to strengthen construction thus fostering a much healthier educational environment. This resulted in more than a dozen private universities running high-quality courses and carrying out high-level teaching and research. Fourth, good presidents were the backbone of the development of private universities. Qualified private universities usually have had excellent presidents, who had unique and firm educational beliefs, were familiar with the laws regarding HE development and were committed to the success of their establishments, creating an outstanding cultural environment and teaching style, making them a powerful educational force (Liang, 1994). They have made great contributions to the management of private universities, funding, teacher selection, curriculum determination and dealing with the complex relationship between universities and the government (Huang, 2001). In 1937, the Second Sino-Japanese War broke out. China’s universities, whether public or private, were primarily located on the south-eastern coast in major cities such as Beijing and Tianjin. While the Japanese army carried out military offensives, it bombed Chinese HE and cultural institutions, and the regular order of teaching and scientific research was interrupted. A large number of Chinese universities were temporarily relocated to the southwest and northwest of China further from the theatre of war (Pan & Liu, 1993). From 1945 onwards, after the end of the war, the relocated universities gradually moved back to their original locations. However, with the almost concomitant outbreak of the Second Civil War in 1945, the domestic political situation became unstable, the economy deteriorated, and the currency devalued making it extremely difficult for private universities to raise funds. Church university funding from the US also dried up as relations between the Kuomintang government and the US government deteriorated. After the 1949 founding of

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the People’s Republic of China, the government placed all educational undertakings under state administration. By 1952, all private universities in China had either been incorporated into or formed new ones in conjunction with public ones. China’s private universities had temporarily ended their history.

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Tan, S. Q. (1995). The Missionary University in Modern China. Hunan Education Press (In Chinese) (教会大学在近现代中国). Tan, W. Q. (1989). The May 4th movement’ spirit: The great motive force of China’s educational modernization. Journal of Central China Normal University (04), 1–11 (In Chinese) (“五四”精 神: 中国教育现代化的巨大动力). Tsinghua University History Writing Group. (1981). Tsinghua University History Draft. Zhonghua Publishing House. (In Chinese) (清华大学校史稿). Wang, B. L. (1998). A piece of history, a kind of spirit and a mirror—Interpretation of Research on the Development of Ancient Chinese Private Schools. Jiangxi Educational Research (02), 71–73 (In Chinese) (一段历史,一种精神,一面镜子—解读 《中国古代私学发展诸问题研究》 ). Wang, B. Z. (1997). Research on Ancient Chinese Private Schools and Modern Private Schools. Shandong Education Press (In Chinese) (中国古代私学与近代私立学校研究). Wei, W. H. (2003). The Biography of Dong Zhongshu. Xinhua Press (In Chinese) (董仲舒传). Wu, N. (1997). The emergence of private schools in ancient China and the characteristics of private schools in the pre-Qin period. Journal of Southwest China Normal University (01), 59–64 (In Chinese) (中国古代私学的产生及先秦时期私学的特点). Wu, Z. H. (1994). The Missionary University and the early modernization of Chinese Higher Education. Journal of Soochow University (4) (In Chinese) (教会大学与中国高等教育的早期 现代化). Xiong, M. G. (1990). The History of Education in the Republic of China. Chongqing Publishing House (In Chinese) (中华民国教育史). Xu, D. X. (1995). The Power and Effect of Science and Technology in Modern Chinese Enterprises. Shanghai Academy of Social Sciences Press (In Chinese) (中国近代企业的科技力量与科技效 应). Xu, Z. Y., & Zhang, M. B. (1996). The earliest church university opened-Soochow University. Republic of China Spring and Autumn (05), 9–12 (In Chinese) (最早开设的教会大学—东吴大 学). Yang, T. Y. (2004). Zhou Li’s Translation and Annotation. Shanghai Ancient Books Publishing House (In Chinese) (译注). Yu, B. Sh. (1993). Academy and confucius private school. Education Review (01), 48 (In Chinese) (书院与孔子私学). Zhang, K. Y. (1991). Chinese and Western Culture and Church University. HuBei Education Press (In Chinese) (中西文化与教会大学). Zhang, K. Y. (1996). Cultural Communication and Missionary University. Hubei Education Press (In Chinese) (文化传播与教会大学). Zhang, K. Y. (1997). Cultural perspectives in the study of Church University History. Journal of Central China Normal University, 3 (In Chinese) (教会大学史研究的文化视野). Zhang, K. Y. (1998). Social Transformation and Missionary University. Hubei Education Press (In Chinese) (社会转型与教会大学). Zhu, Y. H., & Gao, S. L. (1990). History of modern Chinese academic system (Vol. 3 and 4). East China Normal University Press (In Chinese) (中国近代学制史料.第三、四辑).

Chapter 3

Development of Private Higher Education in the People’s Republic of China

In 1949, when the People’s Republic of China was founded, there were 205 universities in the country, 81 of which were private. In December 1949, the Ministry of Education held its first National Conference on Education and proposed that private universities adopted the principle of strengthening leadership and gradual transformation (Su et al., 2013). In 1950, the Ministry of Education issued the Interim Measures for the Administration of Private Higher Education Institutions which aimed to strengthen leadership, actively support and transform private institutions of higher learning to meet the needs of nation-building. The Measures stipulated that the guidelines, tasks, school systems, courses, teaching, and administration of private institutions of higher learning would be subject to the Interim Procedures for Higher Education Institutions and the Interim Procedures for Universities. Private universities were not allowed to make religious subjects compulsory or to force students to participate in religious ceremonies or activities, and the administrative, financial, and property rights of private institutions of higher learning had to be controlled by Chinese citizens (Su et al., 2013). In 1952, the government made wholesale changes to the higher education system nationwide, transforming it from being modelled on British and American institutions of higher education to being modelled on that of the USSR1 (Qin, 1990). Missionary universities were abolished or merged with public universities, while 69 private universities were transformed into public universities, including Yanjing University, where many faculties were incorporated into Peking University and Tsinghua University respectively. The Ministry of Education was responsible for the curricula, teaching materials, student recruitment, and job assignments for graduates. The central government had more extraordinary powers in the allocation of funding, personnel, administration, and day-to-day management of universities. During the Cultural Revolution from 1966 to 1976, many fields such as national education, 1

This established the basic pattern of China’s higher education system for the second half of the twentieth century.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_3

35

36

3 Development of Private Higher Education ...

science, and culture were seriously damaged (Guang, 2016). The national university entrance examination (Gaokao) was cancelled, and the development of higher education was set back.

3.1 Exploration in the 1980s It was not until after the reform and opening-up initiative in 1978 that private HE again began to develop. In the late 1970s and early 1980s, the Third Plenary Session of the Eleventh Central Committee of the CPC established a principle of development that focused on economic construction and following the reform and opening-up guidelines. Under the guidance of the socialist market economy, numerous changes came about. In 1977, Deng Xiaoping presided over a symposium on science and education, where he announced the decision to resume the national university entrance examination which had been suspended since 1966. This was confirmed in October 1977 when the State Council announced its immediate resumption, with unified examination and merit-based admission to select talented students to go to university. Table 3.1 shows that 5.7 million and 6.1 million students sat the 1977 and 1978 university entrance examinations, respectively, and the number of students enrolled in these two years was 273,000 and 402,000, with admission rates of 4.8% and 7%, respectively. Students who took the exam in 1977 entered university in the spring of 1978, and those who took the test in 1978 entered in the autumn of that year. China’s gross enrolment rate in higher education was 1.55% in 1978. Due to the limited number of university places, the vast majority of students who take the Gaokao do not gain access to universities (Liu, 2018). With the rapid development of the national economy and society, many talents were needed in different industries, and people were eager to learn professional knowledge through Table 3.1 Number of participants in the university entrance examination, 1977–1985 Year

Number of participants (millions)

Number of admissions (millions)

Admission ratio (%)

1977

5.7

0.270

4.8

1978

6.1

0.402

7

1979

4.68

0.280

6.1

1980

3.33

0.280

8

1981

2.59

0.280

11

1982

1.87

0.320

17

1983

1.67

0.390

23

1984

1.64

0.480

29

1985

1.76

0.620

35

3.1 Exploration in the 1980s

37

HE and broaden their personal development (Wei, 2002). At that time, the state’s financial resources were limited, and it was unable to meet the demand of the public for higher education in the short term. The severe shortage of public higher education places provided a great space for the development of private HE (Ma, 2020). In this context, many enthusiastic individuals who were passionate about the development of education made use of educational resources such as lecturers who had retired from public universities and set up private HE institutions in the form of classes of both basic theory knowledge and vocational training. The primary purpose of these early private educational institutions was to provide assistance for practical professional training or university entrance examination. In 1977, the Beijing Self-Study Training College was founded. Since then, seven private HE training institutions have been established, the first of which was the Chinese Social University, founded in Beijing in 1982, and which became a symbol of the new beginning of private HE after the reform and opening-up (Zhang, 2001). In 1981, in order to meet the demand for HE, the State Council (1981) approved the establishment of the HE self-study examination. The self-study examination is a national higher education examination based on an academic examination, completed through a combination of individual self-study, and relevant examination content for different professions. Candidates obtain a corresponding certificate or bachelor’s degree through the prescribed professional examination. This proved to be so popular with candidates that a large number of self-examination training courses sprang up. In December 1982, the Constitution of China was promulgated and implemented (National People’s Congress, 1982), which stipulated that the State encourages collective economic organizations, state enterprises and institutions, and other individuals to organize various educational undertakings in accordance with the law. This was the first time that the State had explicitly encouraged non-governmental forces to participate in schooling. Based on breaking the opposition between planned economy and commodity economy, 1984’s Decision on Economic Reform (National People’s Congress, 1984) further clarified the joint development of various economic components under the premise of adhering to the public ownership economy as the main body. The reform of the economic system had brought about tremendous social changes. On the one hand, it resulted in rapid economic growth, a substantial improvement in people’s material living standards, and the gradual development of civil power. On the other hand, economic development and industrial structure adjustment directly affected changes in the structure of the labour force; the need for employees with HE became more and more evident. The number of qualified graduates, especially in economics, accounting, law, and other professional areas was far from meeting the needs of economic construction. The reform of the economic system was bound to cause a reform of the education system. The continuous development of the private, individual, and foreign capital economies promoted economic diversification which fundamentally changed the monopoly position of the government plan. It was in this context that private universities started and developed gradually, with their flexibility to meet the needs

38

3 Development of Private Higher Education ...

of society. Education as a tertiary industry gradually began to operate in a more diversified manner, jointly run by the government and society. Along with the process of social reform and progress, it met the HE needs of the masses. The development of the economy and society had raised the quality requirements for workers. Respect for knowledge and talent spread throughout society and the importance of developing HE was universally recognized. In the three years from 1984 to 1986, as many as 250 new private adult training institutions were built in China and, by 1991, the total number had reached 450 (Zhou, 2007). In 1987, the National Education Commission2 (1987) promulgated the Interim Provisions on the Running of Schools by Social Forces which clearly stated that the running of schools by social forces was an integral part of China’s educational undertakings, a supplement to the State’s provision of education, and stipulated its complementary direction. Social Forces here incudes different social organizations, institutions, individuals, and non-public finance funds. Depending on the actual needs of economic construction and social development in any particular region, various types of short-term vocational and technical education, job training, teacher training for primary and secondary schools, basic education, tutoring schools and classes, and continuing education courses for self-study examinations were authorized. In order to ensure the complementary role of social forces in running schools, the government strictly controls the issuance of diplomas by schools run by social forces. The Interim Provisions state that schools of all levels organized by social forces that have not been authorized to issue national academic certificates may not issue diplomas. The document stipulated that these social forces should actively encourage, strongly support, correctly guide, and strengthen management (Liu, 2018). They were allowed to charge students a reasonable amount of fees, but not to make profits in the name of running a school. In 1991, the State Education Commission reiterated in the Notice on the Higher Education Diplomas Issued without Authorization that no HE diploma could be issued without the approval of the State Education Commission. During this period, there are three key policies in the management policy of China’s national HE. The first was the Constitution. The Constitution, promulgated in 1982, declared that the State encourages collective economic organizations, state enterprise organizations, and other social forces to organize various educational undertakings in accordance with the law. The legal status of private education was thus clarified and this acted as a policy signal to allow private education to develop. In the face of opening-up to the outside world and development of different industries, an economic system reform in full swing and global advances in new technology, the disadvantages of an outdated education system became ever more evident, seen mainly in the divisions in education career management authorities, an overall education structural imbalance and undeveloped education contents and methods. Although the Constitution allowed social forces to organize various educational undertakings, two successive policies at this stage limited their scope to the fields of vocational and technical education.

2

It changed its name to the Ministry of Education in 1998.

3.1 Exploration in the 1980s

39

The second was the Decision on the Reform of the Education System (Central Committee of the CPC, 1986). The central government believed that in order to fundamentally change this situation, it had to begin with the education system and that a systematic reform was essential. This policy proposed that local governments should encourage and guide state-owned enterprises, social organizations, and individuals to run schools, and that the central and provincial governments should support these schools. The third was the Decision on the Reform of the Education System (Central Committee of the CPC, 1986) which stated that, in accordance with the requirements of vigorously developing vocational and technical education, the majority of young people should generally start to diversify from the middle school (approximately age 14/15) stage. Some junior middle school graduates should continue onto “ordinary” academic senior middle school, and some to vocational and technical education. In order to develop vocational and technical education, the State would fully mobilize the enthusiasm of enterprises, institutions, and business units, and encourage collective, individual, and other social forces to run schools of different levels. It was necessary to promote all units and departments to run their own or jointly organized various vocational and technical schools with the education departments and to mobilize the whole of society to care for and support the reform of the education system and to develop the cause of education. This was the first time that the CPC Central Committee had explicitly encouraged collective, individual, and other social forces to run schools in the field of vocational and technical education. Although the Decision on the Reform of the Education System only encouraged private education in vocational and technical areas, this was a huge breakthrough. Allowing social forces to run schools legally in the field of education was seen as a first step and the hope was that this, too, would be authorized for the development of private HE. Obviously, these policy provisions at the central government level clearly defined the legal status of social forces in running schools, playing an important role in promoting the development of private HE at this stage. The third level was the specific policy documents formulated on private HE based on the above two levels. This level mainly included the Interim Regulations on the Financial Management of Schools run by Social Forces and the Interim Provisions on the Administration of Teaching and Management of Schools by Social Forces. These two documents played an important role in the formation and development of China’s national HE system after the reform and opening-up and formed the cornerstone of national HE policy. In order to encourage and support social forces to run schools, the State Education Commission (1987a, b) issued Provisional Provisions on the Running of Schools by Social Forces. For the first time, the Provisional Provisions defined the social forces—as state enterprises and institutions with legal personality, democratic parties, people’s organizations, collective economic organizations, social organizations, academic groups, and private school-runners approved by the state. It specifically stated that social forces-run schools were an integral part of China’s educational undertakings and complemented the state’s educational provisions. It also covered the main forms, levels, categories, enrolment, advertising, funds, finance, approval,

40

3 Development of Private Higher Education ...

and appointment of teachers and the administrative departments of education at all levels updated their administrative authority to include social forces-run schools. The Provisional Provisions was a comprehensive management regulation, which was embodied in the status, nature, and role of social forces in running schools, as well as the examination, approval, enrolment, funding, income, and other aspects of specific matters. Financial management and teaching management were the key aspects of private HE policy concerns during this period. The Provisional Provisions also covered the financial aspects regarding fund-raising in which the private institutions shall raise their own funds. The fees and methods were to be published by the education administrative departments of the provinces. The whole income and fixed assets of the schools were to be organized by the individuals or organizations which owned the schools. The schools would establish and improve the financial management system, adhering to the principle of financial openness, thrift, strictly abide by national financial discipline, and accept supervision and inspection by the relevant ministries and departments of finance, banking, auditing, and education. At the same time, the Interim Provisions on Financial Management of Running Schools by Social Forces (State Education Commission, 1987a, b) put forward the principle of unified leadership, hierarchical responsibility, and independent accounting. It made more specific and detailed provisions regarding funding sources, expenditure, daily financial management, and suspension of social forces in private running schools. It also proposed that the education and finance departments of all provinces, autonomous regions, and municipalities directly under the central government could, in accordance with these regulations and the conditions of their respective regions, plan specific implementation measures jointly with relevant departments and submit them to provincial people’s governments for approval before implementation. This showed that the state attached great importance to the financial management of running schools by social forces, and clearly stipulated that no illegal profit should be made by running a school.

3.2 Development in the 1990s 3.2.1 Social Background In 1992, Deng Xiaoping visited Shenzhen, Guanghzou, Shanghai, and other cities in the south of China in what was known as the Southern Talks. The Southern Talks emphasized adherence to Marxism, firm socialist beliefs and reaffirmed the ideological line of emancipating the mind. He stressed that “more planning or more market is not the essential difference between socialism and capitalism; the planned economy is not equal to socialism, capitalism has a plan, the market economy is not equal to capitalism, socialism also has a market”. He affirmed the achievements of

3.2 Development in the 1990s

41

reform and opening-up and the development of the market economy and reiterated the necessity and importance of deepening reform and accelerating development. In 1992, the 14th National Congress of the Communist Party of China made it clear that the goal of China’s economic system reform was to establish a socialist market economy system. It required the whole party to seize the opportunity to accelerate development and concentrate on development and construction. In the process of establishing a socialist market economic system, the congress proposed that the state should create conditions for all kinds of ownership economies to participate equally in market competition and treat all kinds of enterprises equally. At the same time, large-scale restructuring of state-owned enterprises began to be implemented and many state-owned enterprises were beginning to streamline their workforces. From 1992 to 1998, large-scale reform of state-owned enterprises led to a large number of workers being made redundant; in 1997 alone, 21.15 million people were made redundant. These laid-off workers became a potentially destabilizing factor. In the early 1990s, China’s economy overheated, and inflation continued to rise resulting in the state adopting a series of policies to reduce the inflation rate: by 1996, it had fallen to 8.3% from 24.1% in 1994. However, the economic growth rate had also slowed considerably. In 1997, the 15th National Congress of the Communist Party emphasizes the principle of the basic economic system in which public ownership is the main body and the common development of multi-ownership economy as a basic economic system in the primary stage of socialism in China. It pointed out that the non-public economy was an indispensable and irreplaceable part of China’s socialist market economy. In early 1999, the Amendment to the Constitution was adopted, which stated that individual, private, and other non-public economies within the scope of the law were an important part of the socialist market economy. The State3 protects the legitimate rights and interests of the individual economy and the private economy as well as guides, supervises, and manages them. This statement provided an institutional environment for the development and expansion of the private economy and promoted its development. Between 1992 and 1999, the number of private enterprises with registered capital of more than 1 million yuan increased from 1,801 to 164,005. During this period, the output value of private enterprises in China increased from 20.5 billion to 768.7 billion yuan, 9.37% of GDP (Mu, 2003). The private economy was the fastest growing economic component of China’s reform and opening-up; it became a very dynamic economic growth point in the national economy and, along with other non-public economies, has played a vital role in the sustained and stable growth of the economy. With the support of a series of policies, China’s private economy has continued to grow, and large-scale and robust private enterprises have emerged. At the same time, people’s expenditure on education expanded. From 1993 to 1999, the per capita disposable income of Chinese residents increased, as did their expenditure on education consumption. The per capita monthly living expenses of urban residents in China in the first nine months of 1995 took up 90.7% of income; 3

At end do a global search on this word and check that it has been capitalized where necessary.

42

3 Development of Private Higher Education ...

education expenditure was 4.97% of income, 2.34 times the national average household education expenditure ratio in 1987 (National Bureau of Statistics, 2000). The data shows that residents’ expenditure on education accounted for 5.2% of total residents’ expenditure. It shows that the education expenditure of residents presents a trend of increasing. With improvement in people’s material living conditions, demand for educational diversification increased, and with the state financially unable to meet this increased demand, private HE stepped in and expanded significantly.

3.2.2 Policy on Private HE In 1992, the government approved the establishment of the first ten privately-run universities to offer three years full-time education and issue HE diplomas. At that time, although there were still more than 1000 institutions that provides HE courses, they did not meet the requirements of the State to issue diplomas (Tao, 1996). The Outline for China’s Education Reform and Development (State Council, 1993) proposed to reform the situation of the original state-sponsored schools from kindergarten to university gradually to establish a system in which public schools were dominant and all sectors of society participated in running them. The Outline stated that social groups and individual citizens running schools should adopt active encouragement, strong support, correct guidance, and a strengthened management approach. This set the tone for the development of private education. At the same time, the Outline pointed out that HE should gradually form a new form of running schools, mainly at the central and provincial levels, with the participation of all sectors of society. In 1993, the Provisional Provisions on the Establishment of Private Higher Education Institutions (State Education Commission, 1993) stated that private HE institutions were an integral part of the cause of HE in China and that the State encouraged the establishment of private HE institutions. This was reaffirmed in the Education Act (1995) and the Ninth Five-Year Plan (1996–2000) for National Economic and Social Development. In 1997, the first administrative regulation specifically for private education, the Regulations on the Running of Schools by Social Forces (State Council, 1997) stated that the running of schools by social forces is an integral part of the cause of socialist education. It required all administrative levels of governments to incorporate private education into national economic and social development planning and further define the basic principles for the development of private education, the administrative system, the establishment of private educational institutions, assets, and financial management, teaching management, institutional change, dissolution, government guarantees, and support. During this period, the state actively promoted the reform of the school system and promoted the diversification of the main body of HE. The Higher Education Law (National People’s Congress, 1998) states that the state shall, in response to the needs of economic construction and social development, formulate plans for the development of HE, organize HE institutions, and actively develop the cause of HE

3.2 Development in the 1990s

43

in various forms. The Action Plan for the Revitalization of Education for the twentyfirst Century (Ministry of Education, 1998) stated that in the next three to five years, the government would be the main investment body in schools of different levels, but that different sectors and industries of society could participate in investing and forming the common development of public and private schools. This shows that the government’s attitude towards private HE had undergone major changes. It clarified the basic position of the state on private HE—positive encouragement and strong support: these documents created a favourable policy environment for the development of private education. With these and the growth of social demand, private educational institutions developed rapidly. From the 1980s to the beginning of the 2000s, there was a consistent, state-led concern to move away from the state planned centralized model of the economy and encourage the expansion and growing vitality of different sectors of society. The development of the economy and society required many professionals, which could only be provided by the expansion of HE provision. However, at that time, the budget for HE and the number of student places in the university sector were limited. In 1997, the Regulations on the Running of Schools by Social Forces (State Council, 1997) stipulated those social forces should focus on the organization of educational institutions for the implementation of vocational education, adult education, advanced secondary education, and pre-school education. The State strictly controlled the organization of HE institutions by social forces. In 1992, there were only 10 private universities in China that independently issued state-recognized diplomas although this number had increased to 20 by 1997 (Ma, 2020). Before the mid-1990s, most private universities achieved rolling development with limited capital investment, but from the mid-to-late 1990s, some large private enterprises and listed companies became interested in the market space of HE. At the beginning of the twenty-first century, about 10 listed companies funded private HE (Pan et al., 2012). At the same time, private universities, which initially relied on less capital investment, had also begun to use various financing means, including loans and fund-raising, to increase investment efforts (Pan et al., 2012) (Table 3.2). In 1998, the state endorsed the strategy of using science and education to improve the development of the country. The Higher Education Law published in 1998 stipulated that the State encouraged enterprises and institutions, social organizations and other social organizations and citizens and other social forces to organize HE institutions, and to participate in and support the reform and development of HE. In 1999, the Decision on Deepening Education Reform and Promoting Quality Education (Central Committee of the Communist Party and State Council, 1999) stated that more progress should be made in the development of private education, encouraging social forces to organize secondary school and higher vocational education, and emphasizing again that social forces could establish HE institutions.

Outline of Education and Reform and Development

Opinions of the State Council on the Implementation of the Outline for China’s Education and Reform and Development

Teachers’ Law

Provisional Provisions on the Establishment State Education Commission of Private Higher Education Institutions

1993

1993

1993

1993

National People’s Congress

State Council

The Central Committee of the Communist Party and the State Council

State Education Commission

Provisional Provisions on the Running of Schools by Social Forces

1987

Issuing department

Name of policy/regulation

Years

Table 3.2 Summary of policies and regulations relating to the nature and status of private HE

(continued)

Private universities are an integral part of HE in China

The treatment of teachers in schools run by social forces shall be determined and guaranteed by the organizers themselves

It shall speed up the reform of the school system and form a new system combining government-run schools with the participation of all sectors of society. Ordinary universities are mainly run by the government and actively develop various forms of joint running

To gradually establish the system of government-run schools, all sectors of society to run schools together. The State shall, in accordance with the law, actively encourage, strongly support, correctly guide and strengthen the management of schools run by social organizations and individual citizens

The running of schools by social forces is an integral part of China’s educational undertakings and a supplement to the running of schools by the state

Terms and content

44 3 Development of Private Higher Education ...

Education Law of the People’s Republic of China

Opinions on Social Assistance Work in Self-Study Examinations for Higher Education

1995

1995 State Education Commission

National People’s Congress

Notice on the Financing of Social Funds by State Education Commission Private Schools

1994

Issuing department

Name of policy/regulation

Years

Table 3.2 (continued)

(continued)

Actively develop social assistance, register social aid activities, organize student aid activities in various HE institutions and social aid, strengthen guidance and supervision of social aid activities, implement the principle of separation of duties and responsibilities, and create a fair and orderly environment for student aid

The State encourages enterprises, institutions, and social organizations, and individual citizens to organize schools and other educational institutions under the law. No organization or individual may organize schools or other educational institutions for profit

To promote the healthy development of private education; to allow some local private schools to raise funds. It establishes clearer provisions on the purpose of running a private school, limits the educational fees charged by private schools, and controls the use of funds raised, the use of interest and income from the establishment of funds, financial management and system, and the requirements for approving private schools

Terms and content

3.2 Development in the 1990s 45

The Ninth Five-Year Plan for National Economic and Social Development and the Outline of Vision Goals 2010

Opinions on the Implementation of the Pilot State Education Commission Work of the Diploma Examination for Higher Education

Regulations on the Running of Schools by Social Forces

1996

1996

1997

State Education Commission

National People’s Congress

National People’s Congress

Vocational Education Law of the People’s Republic of China

1996

Issuing department

Name of policy/regulation

Years

Table 3.2 (continued)

(continued)

Schools run by social forces are an integral part of the socialist educational cause. Different levels of governments should strengthen their leadership in running schools with social forces and incorporate the cause of running schools by social forces into national economic and social development plans

HE diploma examination is the national education certification examination for students of private universities who do not yet have the qualifications to issue diplomas

Gradually form a new system of combining government-run schools with the participation of all sectors of society. Promote various forms of the joint running of schools, optimize the allocation, and make full use of educational resources

The State encourages institutions and social organizations and individual citizens to organize vocational schools and vocational training institutions following the relevant provisions of the State

Terms and content

46 3 Development of Private Higher Education ...

Name of policy/regulation

Higher Education Law of the People’s Republic of China

Years

1998

Table 3.2 (continued) National People’s Congress

Issuing department

The State encourages enterprises, institutions and social organizations, and citizens and other social forces to organize HE institutions according to the law, to participate in and support the reform and development of HE… The internal management system of HE institutions organized by social forces shall be determined following the provisions of the State concerning the running of schools by social forces

Terms and content

3.2 Development in the 1990s 47

48

3 Development of Private Higher Education ...

3.2.3 Diploma Examinations for Higher Education Degrees In the middle of the 1990s, the State established a diploma examination for HE degrees. In order to gain this diploma, students had to complete a prescribed course of study and pass the examination. These diploma courses were aimed at secondary school or equivalent graduates who had not been admitted to public academic universities. The main bodies providing these courses and carrying out the examinations were privately funded private educational institutions which had been approved by and registered with the provincial education departments. These diploma examinations were mainly available for the application-oriented and professional-type professions urgently needed by society. The professional teaching plan was guided by the requirements of the State Education Commission for adult HE at that time and was determined in detail by the provincial education administrative departments. The professional teaching plan emphasized the application type and vocational skill training, attaching importance to practical teaching. This new educational scheme combined national professional examinations and full-time study. Institutions were responsible for recruiting students and providing courses. Exams were divided into three parts, the national unified examination, the provincial unified examination, and those of the individual institution. This model effectively promoted the development of private HE training institutions: it allowed private educational institutions which did not meet the requirements to become national full-time universities, to gain experience in running courses of HE in practice and won the time and space for the institutions’ development because they could offer training courses as a qualification. This model became an important factor in the improvement of private institutions as they were able to provide nationally accepted course teaching and recruit a steady stream of students. The transitional period was crucial for these institutions: they obtained time and space to develop under the guidance of the government. The certain pass ratio of the national unified examination meanwhile provided evidence of the teaching quality that was needed if they were to be upgraded to a degreeawarding institution. By 2000, 467 private training institutions were accredited to offer the diploma examination for HE certificate and these private training institutions provided the basis of the private university sector in the 2000s. In 2004, the Notice on Cancelling the Diploma Examination of Higher Education (Ministry of Education, 2004) led to the end of the diploma examination while many of these training institutions in later years developed to be private universities.

3.3 Expansion in the 2000s

49

3.3 Expansion in the 2000s 3.3.1 Expansion of Higher Education In 1997, the World Bank and UNESCO published separate reports on the state of HE development in the world; both acknowledged that it was facing a worldwide crisis caused by a surge in enrolment in HE, a rapid expansion in size and serious underfunding. In response, the World Bank advocated for the privatization of HE, while UNESCO believed that countries should increase their investment in education in the long-term interests of economic development and social equity. In fact, the private HE sector become a breakthrough point in the reform of education in various countries. The educational system consists of two main aspects. One is the creation and operation of private schools in the traditional sense. The second is the use of the laws and mechanisms of the market economy to manage public and other educational institutions and units. Since private schools and educational institutions operate according to market laws, the privatization of education can also be summarized as the use of market laws and mechanisms to manage the processes and trends of schools and educational institutions (Qu, 2001). The advent of the knowledge economy made the role of education, in particular HE, in economic growth and personal development increasingly prominent. By the end of the 1990s, the discrepancy between the supply and demand for HE was prominent in China. In accordance with the Action Plan for the Revitalization of Education for the twenty-first Century (Ministry of Education, 1999), HE was expanded on a large scale to meet domestic demand, stimulate consumption, promote economic growth, and ease industrial pressure. The Action Plan predicted that the gross enrolment rate in HE would be close to 15% by 2010. With the implementation of the expansion policy, public universities were oversubscribed and were unable to provide more places to meet the demand. The State still had limited public financial resources for HE and so was unable to help. As a result, the government encouraged private capital to enter the field of HE and create more opportunities for HE through flexible and diverse modes of running schools. Since the expansion of HE enrolment, the number of university students nationwide increased from 1 million in 1997 to 1.08 million in 1998 and 1.6 million in 1999, representing a growth rate of 47.4%. The gross enrolment rate in HE increased from 9.1% in 1997 to about 11% in 2000 and, in 2000, 2001, and 2002, the university enrolment rate was 38.1%, 21.61%, and 19.46% respectively (Ministry of Education, 2009) (Tables 3.3 and 3.4). In the market economy system, the market plays a positive role in regulating economic activities, and HE is no exception to this. For individuals, HE directly affects their career choices and economic income. For employers, the level and quality of the talent they employ directly affect the competitiveness of their enterprises. For the state and society, the large number of specialized personnel trained in HE directly affects the development of the country’s economy and society (Zhang, 1993). Overall, the development of private HE had a positive impact. It solved the mismatch between

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Table 3.3 Number of private universities and students (1993–2004)4 Year

Private Universities

HE diploma examination institutions

Other HE institutions

Number Number of Number Number of Number Number of students (10,000) students (10,000) students (10,000) 1993

10

/

15

800

800

1994

18

/

/

880

880

1995

18

/

/

1209

1209

/ / 71

1996

21

1.2053

89

1109

1109

108.4

1997

20

1.6054

157

1095

1095

119

1998

22

2.2232

/

1200

1200

/

1999

37

4.0186

25.8

1240

1240

118.4

2000

43

6.8321

29.7

1282

1282

98.17

14.0359

32.1

1291

1291

128

2001 124 2002 133

31.98

36.7

1202

1202

140.35

2003 173

81.0030

39.3759 1104

1104

100.4048

2004 228

71.1

/

1187

105.33

*

1187

“/” in the table means “did not find accurate numbers”

Table 3.4 Number of private universities from 2004 to 2013 (Seven-Party Institute of Education, 2016)

Year

Number of universities Year

Number of universities

2004 226

2009 658

2005 250

2010 676

2006 276

2011 698

2007 295

2012 707

2008 638

2013 718

the shortage of funds for HE and the expansion of HE by the state. In the 1980s, the government supplied over 95% of China’s general HE funding, but by 1998, this had dropped to 60%, despite the number of HE institutions increasing (Wang, 2008). It also promoted the diversification of the mode of supply of HE and increased the choice of HE for students. A feature of the development of modern HE is the increase in student choice, most easily supplied by the process of privatization (Zeng, 2012). In addition, the privatization of HE introduced the corporate governance model into its management, to maximize efficiency and benefits, streamline institutions, and make effective use of funds, all of which contributed to the overall improvement in school management efficiency. As Pan (2005) stressed, quality is the lifeline of universities; under the condition of privatization of HE, students and employers are more like consumers of 4

2002 the Green Paper on Private Education and the Yearbook of Chinese Education Statistics (2003–2005).

3.3 Expansion in the 2000s

51

HE, and the survival and development of private universities are greatly influenced by the satisfaction and recognition of their students. Significant changes have taken place in HE since it became subject to market mechanisms. On the one hand, HE has begun to compete with other industries in terms of capital and talents. HE now obtains funds from the market, which alleviates the development dilemma caused by an insufficient investment of national education funds. Because of market competition, the attraction and retention of talented people in universities have become a more critical issue. Graduate employment, because of freedom of choice and autonomy is now mainly dependent on the labour market. Due to the coexistence of both public and private economic components and improvements in people’s income, diversification of investment channels in HE has become possible (Zhong, 2010). Only graduates in subjects that meet the needs of economic and social development can obtain good employment opportunities in the labour market; thus professional institutions that meet market demand can attract highquality students and teachers and obtain more income, thereby improving teaching efficiency and educational quality. Private HE attracts a large amount of private funds and promotes the quality and efficiency of HE. After introducing the market mechanism in HE, a competition mechanism was also established between public HE and private HE. In 2002, the State promulgated the Law on the Promotion of Private Education, which was implemented in 2003 to further standardize and promote the development of private HE, and private universities and their management activities entered an orderly and standardized period of development (Ma, 2020). Altbach (2005) points out that the development experience of many countries has shown that when public finance cannot meet the development needs of society for HE, private universities will be given the space to develop in order to provide what the public universities cannot. China is no exception. Private HE in China effectively promoted the process of popularization of HE, alleviated the problem of insufficient investment in public HE, met the diversified needs of the people for HE, trained a large number of practical talents for society, provided a large number of jobs, and reduced the structural unemployment of high-level talents (Zhong et al., 2010). In China, private HE mainly focused on vocational and technical education. Private universities concentrate on teaching professional skills to students and training a large number of applied technical personnel for the community. Pan et al. (2012) point out that the investment in private HE has alleviated the financial problems of national public HE development, delivering investment in running universities and stimulating development of hundreds of billions of yuan of assets. Without this private investment, China’s HE development may have stalled for years and millions of students would have lost their educational opportunities: private investment in HE has played an irreplaceable role in the development of social welfare. When private HE was established, it developed a flexible management mechanism, market-oriented talent selection, a salary distribution mechanism, and a talent training mechanism, all of which promoted its rapid development. The practice has proved that private HE has made a positive contribution to alleviating the pressure on national investment in education, meeting the needs of society for HE, cultivating

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Table 3.5 Sources of Funding for Private Universities (2011–2012) (Ministry of Education, Ministry of Education, 2013a, b) Tuition Shareholder Donations Government University-run Other Total investment funds businesses 2011 Amount 48.16 (billions of Yuan) Percentage 88.24 (%)

2.696

0.123

2.674

0.085

0.842 54.58

4.94

0.23

4.90

0.15

1.54

0.165

4.318

0.074

1.708 61.842

0.27

6.98

0.12

2.76

52.248 3.329 2012 Amount (billions of Yuan) Percentage 84.49 (%)

5.38

100

100

a large number of talents for social development, and promoting the overall progress and sustained healthy development of society. Private universities have carried out exploratory reforms and practices in operation management, personnel training and management, and income distribution mechanisms, and provided a valuable practical experience in promoting the development and reform of HE. In 2010, the State Council published its Outline of the National Medium- and Long-Term Program for Education Reform and Development (2010–2020) which addressed the subject of private universities being able to award master’s and doctoral degrees. In 2011, five private universities—Beijing City College, Xijing College, Jilin Overseas Chinese College, Hebei Media College, and Heilongjiang Oriental College—were approved by the Ministry of Education to run post-graduate courses and award master’s degrees, making a further improvement in the level of academic training in private universities. It is expected to in the next step some private universities can award doctoral degrees. Private universities rely mainly on tuition fees as their primary source of income: 80% comes from fees, just under 5% comes from shareholders, less than 10% from government funds, and the remainder from other income, including donations and university-run enterprises (see Table 3.5). It should be noted that over-reliance on tuition fees as the primary income may affect the sustainable development of private universities.

3.4 Policy for Private Higher Education In the 1990s, the introduction of market mechanisms to HE promoted competition in the field. While this helped to improve the quality and efficiency of HE, it also brought some challenges, especially the contradiction between the profit-seeking of private university shareholders and the attribute of public goods to education (Yang & Gan, 2009). Driven by fierce competition and interests, the field of private HE has

3.4 Policy for Private Higher Education

53

suffered a series of problems, such as violating regulations to blindly expand the scale without making appropriate provisions; this resulted in disorder and confusion in the private HE market and caused severe damage to its social reputation. Some private universities blindly cater to market demand in the professional and curriculum settings and frequently change the subjects available for study, making it difficult for them to develop expertise in any given area (Luo and Fan, 2014). Some shareholders are only interested in for-profit incentives: they are not particularly interested in education but rather seek to make private education over into an industry to pursue profits. This bias can lead to the severe deviation of private HE from the law. HE development, in general, tends to be caught up in and suffer the consequences of the main private problem of blindly expanding the scale of enrolment while having an unstable source and poor management of funds and declining quality of running a school. This required the State to strengthen the regulation and management of private HE. Starting in the late 1990s and especially since the twenty-first century, the State has promulgated a series of policies concerning the sustainable development of private universities which share a number of characteristics. In 2002, the Law on the Promotion of Private Education was published. It is considered to be one of the most important institutional arrangements in the development of private education and a breakthrough in the history of private HE. Acknowledging the desire of private funders to see a return on their investments, the document states that funders may obtain a reasonable return on their investment in the university. The Law represented an essential breakthrough in the concept of government departments (Wang and Xu, 1999). This is in stark contrast to the first 20 years of the development of private HE when policy always stressed that social forces should not run schools for profit. In 2007, the Regulations on the Administration of Private Higher Education (Ministry of Education, 2007) emphasized the principles of actively encouraging, strongly supporting, correctly guiding, and managing, according to law to guide the development of private HE. At this stage, private HE policy regulated a number of issues including the status of teachers and students, interests of funders and property rights of private universities. These principled policy provisions created a relatively stable institutional environment for the development of private HE at this stage and effectively promoted its healthy development (Zhang and Zhang, 2007). In 2010, there were 676 private universities in China, approximately 25% of the total number (State Statistical Bureau, 2011) when the Outline of the National Medium and Long-Term Education Reform and Development Plan (2010–2020) was published. The Outline pointed out that private education was an important growth point for the development of education and an important force for promoting educational reform. It asked the governments at different levels to pay particular attention to the development of private education. Since 2010, the private HE policy, in addition to continuing its previous focus on the status of private HE and adhering to the policy of management according to the law, has incorporated the improvement of the quality of education into its main points. After the Constitution granted legal status to private HE in 1982, the government’s interpretation of its status and role

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3 Development of Private Higher Education ...

has gone through a constructive development process: from supplement to important force, it embodied a breakthrough in understanding and concepts. In the Outline, the management of private HE mainly involved the following aspects. First, to protect the rights of teachers and students in private universities, it formulated preferential policies to promote the development of private education and corrected different kinds of unfair policies against private schools. It also encourages private universities to improve their development to meet the conditions for granting bachelor’s, master’s, and doctoral degrees in accordance with the prescribed procedures. It supported governments at or above the county level to set up special funds to finance private schools in accordance with the specific needs of their administrative regions. Organizations, schools, and individuals that made outstanding contributions to the development of private education were rewarded and recognized by the State. It asked the education administrative departments to effectively strengthen the overall planning and management of private education at all levels; actively explore the classification and management of for-profit and non-profit private schools; improve the governance structure of private schools; clarify the mechanism for the change and withdrawal of private schools in accordance with the law; establish a risk prevention mechanism and information disclosure system for private schools; and strengthen the assessment of private education. The Outline required private HE institutions to establish a board of directors as a decision-making body in accordance with the law, improve their rules of procedure, perform their functions and powers in accordance with the law, and participate in the governance of institutions through this decision-making body. The Outline also called for determining the terms of reference of the principals of private universities, improving the system of Party organizations and staff congresses in private universities, and gradually promoting the system of supervisors. The Amendment to the Private Education Promotion Law (National People’s Congress, 2016), another important regulation, stated that private schools and universities shall establish boards, boards of directors or other forms of decision-making bodies and establish corresponding monitoring mechanisms. The organizers of private schools shall participate in the running and management of schools in accordance with the powers and procedures prescribed in the school charters. The powers of the school board, board of directors or other forms of decision-making bodies, and the powers of principals, were also prescribed. The Amendment stated that private schools and universities should enjoy the property rights of legal persons of different styles of assets including donated property and the profits made through their operation. This provision clarified the property rights of private universities which were conducive to avoid the loss of funds for running schools and the effective investment of funds for running schools (Table 3.6). Overall, a number of policies for private HE present several characteristics. First, the scope of private HE policy continued to expand. Multiple actors actively played their respective roles in the process of private HE policy, and the responsibility for policy subjects also changed. Second, the government’s management of private HE began to attach importance to the functions of supervision and evaluation. According to the relevant policies at this stage, social institutions and forces could supervise

Private Education Promotion Law

Several Provisions on the Administration of private HE

2002

2007

Policy name

Table 3.6 Breakout phase policy text Issuing department

Ministry of Education

National People’s Congress

Terms and content

(continued)

The administrative department of education at different levels shall incorporate private HE into their educational development plans

Private education is a public welfare undertaking and an integral part of socialist education. Government shall incorporate private education into national economic and social development planning

3.4 Policy for Private Higher Education 55

Outline of the National Medium- and Long-Term Education Reform and Development Plan (2010–2020)

Implementation Opinions on Encouraging and Guiding Private Funds into the Field of Education to Promote the Development of Private Education

Amendment to the HE Law of the People’s Republic of China

2010

2012

2015

Policy name

Table 3.6 (continued)

National People’s Congress

Ministry of Education

State Council

Issuing department

(continued)

To delete the provision that private HE institutions are not allowed to operate for profit The State encourages enterprises and institutions and social organizations and citizens to organize institutions of higher learning in accordance with the law and to participate in and support the reform and development of HE

To encourage and guide the development of private funding in education and social training, and to promote the sustainable development of private education

The outline clearly states the government should actively explore the classification management of for-profit and non-profit private schools Adhere to the principle of public welfare in education, improve the system of running schools with government-led, social participation, foster diverse forms of running schools and their vitality, and form a pattern of common development of government-run schools, and active participation of the whole society in public education and private education Private education is an important growth point for the development of education and a significant force for promoting educational reform. Governments should prioritize the development of private education, encourage the financing of schools, and promote social forces to organize education independently and jointly in various forms

Terms and content

56 3 Development of Private Higher Education ...

2016

Amendment to the Private Education Promotion Law

Policy name

Table 3.6 (continued) National People’s Congress

Issuing department

Organizers of private schools may choose to set up non-profit or for-profit private schools. The organizers of non-profit private schools shall not make a profit from running a school, and all the income of the school shall be reinvested in the operation of the school. The organizers of for-profit private schools may obtain an income from running a school within the relevant laws and administrative regulations

Terms and content

3.4 Policy for Private Higher Education 57

58

3 Development of Private Higher Education ...

private HE and social intermediary organizations could evaluate private HE. The Outline of the National Medium and Long-Term Education Reform and Development Plan (2010–2020) clearly stated the requirement for the establishment of a risk prevention mechanism and information disclosure system for private schools. This strengthened the responsibility of the governments at different levels, increased the monitoring and evaluation of the implementation of private HE policy, and introduced the professional evaluation institutions of third parties, public supervision, and mass media supervision. The Decision on Major Issues Concerning the Comprehensive Deepening of Reform (Central Committee of the Communist Party, 2013) stated that the overall goal of comprehensively deepening reform was to improve and develop the socialist system with Chinese characteristics and to modernize the national governance system and governance capacity. The policy pays attention to the support and reward of private universities. In terms of public finance support for private universities, as early as 2002, the Law on the Promotion of Private Education included a special chapter on support and reward which detailed the specific policy measures and created a new public governance model for the government to purchase private school education services. The Outline of the National Medium- and Long-Term Education Reform and Development Plan (2010–2020) explicitly stated for the first time that a sound public finance support policy for private education was to be put forward, indicating that the government had begun to attach importance to public finance’s support for private education. The Law on the Promotion of Private Education stipulated that the government at or above the county level could set up special funds to finance the development of private schools and to reward and recognize collectives and individuals who had made outstanding contributions. It stipulated that the government at or above the county level could support private schools by purchasing services; non-profit private schools could also apply for government subsidies, fund incentives, donation incentives, and other support measures. In terms of tax policies, the Law on the Promotion of Private Education stipulated that private schools could enjoy preferential tax policies as prescribed by the State; it also stipulated that private schools could accept donations from citizens, legal persons or other organizations in accordance with the relevant laws and regulations of the State and the State would give tax incentives to citizens, legal persons or other organizations that donated property to private schools in accordance with the relevant provisions and give them recognition.

3.5 Classification Support and Supervision A number of different documents stipulated that private universities should not be operated for profit. For example, the Provisional Provisions on the Establishment of Private Higher Education of 1993 clearly stated that private HE institutions should not operate for profit. The Education Law of 1995 stated that no organization or individual might organize schools and other educational institutions for profit making. The Regulations on the Running of Schools by Social Forces of 1997 stipulated that

3.5 Classification Support and Supervision

59

those social forces should not organize educational institutions for profit making. The 1998 Higher Education Law emphasized and reaffirmed that the establishment of HE institutions should be in line with the national development plan for HE, with the national interests and public social benefits, and should not be for profit. Overall, the policy in the 1980s and 1990s emphasized that private HE should not be run for profit. The Outline of the National Medium and Long-Term Education Reform and Development Plan (2010–2020) strongly supported the development of private education and its management in accordance with the law. It also championed actively exploring the classification management of for-profit and non-profit private schools. The 2016 Amendment to the Law on the Promotion of Private Education proposed the classification and management of for-profit and non-profit private education institutions. It also stipulated that the organizers of private schools could choose whether to set up as non-profit or for profit. However, for-profit private schools were prohibited from offering compulsory education. The organizers of non-profit private schools were not allowed to make any income from running the school, and all income had to be reinvested in the school. The organizers of for-profit private schools were allowed to obtain the proceeds of running such a school, but the financial matters had to be handled in accordance with the provisions of relevant laws and administrative regulations such as the Company Law. This Amendment provided for the implementation of non-profit and for-profit classification management of private schools, opening the era of classification management of private HE (Liu et al., 2021). The Amendment provides a legal basis for strengthening the top-level design of the national level of private education development, addressing the key problems facing the development of private education from the legal level, and establishing classification management (Zhou & Zhao, 2014). The key details of the changes in the Amendment are summarized below. First, it acted to further strengthen the construction and influence of the Party in private schools. It emphasized that the CPC in private schools should actively arrange activities according to the Party Constitution and play the core political role in the school to ensure that the private school always adheres to the direction of socialism. Second, it sought to differentiate private schools that were managed on a non-profit basis from those that were for profit. According to this Amendment, for-profit education became permissible for all education other than compulsory education from the ages of six to fifteen. This provided the legal basis for private universities to be run on a for-profit basis. The non-profit private schools would receive the same treatment as public schools in terms of tax incentives and land use as well as, possibly, some other supplements including government subsidies and funding. This Amendment acted to further protect the rights and interests of shareholders who were now allowed to participate in the management of the school in accordance with the procedure and provisions of the school’s Constitution. Mechanisms to protect the rights and interests of staff and students were strengthened. The Amendment sought to further improve governance mechanisms, stipulating that private educational institutions should establish decision-making bodies and supervisory mechanisms. This brought the framework that applies to universities into force for

60

3 Development of Private Higher Education ...

other types of educational institutions. Educational administrative departments and relevant departments should establish information disclosure procedures and comprehensive archives of credit and rule-breaking records for these private schools. It authorized provincial governments to adopt the relevant specific provisions in accordance with the law to ensure the stability of existing schools. The Regulations on the Classification and Registration of Private Schools (Ministry of Education, 2019a, b) emphasized that, after the approval of the official establishment of private schools, the examination and approval organ shall classify the schools according to the regulations as the registration administrative organ for registration certificates or business licenses. The examination and approval organ shall issue a school-running license to a private school that has been approved for formal establishment. Where an existing private school chose to register as for profit was required to conduct financial liquidation, clarify the ownership of property such as land and school buildings, and finance of school running according to law and paying relevant taxes and fees. For-profit private schools, formally approved for establishment, should register with the administrative department for industry and commerce in accordance with the jurisdiction prescribed by laws and regulations (Ministry of Education, 2019a, b). In 2021, the Regulations on the Implementation of the Private Education Promotion Act were promulgated. This is a supporting document to the Amendment published in 2016, and it guides local governments on how to formulate and implement the Amendment. It strengthens the policy basis for the rule of law and management of private education, improving the system of private education development, optimizing and creating a policy environment for private education development, and promoting private education to participate in the new stage of development (Xu, 2021). In addition, in order to protect public welfare, the Regulations on the Implementation put forward restrictive measures regarding improper profit-seeking behaviour in the field of private education. Some private schools had used this approach to obtain profits from running private schools, especially in the education enterprises listed in bundled non-profit private schools; the existence of various transactions and the negative impact they have had long been a blind spot in the management of private education. The Regulations stipulated that the organizer may participate in or appoint representatives to participate in the board of directors or other forms of decision-making bodies in accordance with the procedures prescribed by laws, regulations, and school charters, and exercise the corresponding decision-making and management powers in accordance with the powers prescribed in the school charters. The new Regulations seek to implement comprehensive and effective norms and supervision from within and outside the legal person of non-profit private schools (Qin, 2021). The government’s supervision of non-profit private schools includes both finances and business while the core of social supervision lies in the implementation of the information disclosure system and professional supervision. Social supervision is an important part of the operating system of non-profit legal persons and an important way for non-profit private schools to gain social trust. The Regulations require that the authority shall promptly disclose information about the quality of private schools,

References

61

their charging standards and methods, use of funds, major related transactions, and the status of school assets in terms of a list required by the administrative departments of education and relevant departments. This information disclosure system is an effective way to strengthen the effectiveness of social supervision as it allows misbehaviour to be brought to the attention of the relevant authorities and the public. The Regulations established substantive norms and binding provisions in the implementation of the property rights, improvement of the internal corporate governance structure, and improvement of the operating mechanism of organizations. The Regulations seek to improve the mechanisms of the boards of private schools, and ensure the openness of the boards and supervisory boards. Non-profit private schools have the status of non-profit legal persons, but also need to improve and strengthen the organization and governance structures and operating mechanisms that do not benefit private interests (Wang, 2021). The above policies proposed a series of initiatives to guide and encourage financial assistance, tax incentives, and land allocation to increase support for non-profit private schools, focusing particularly on supporting their construction and quality improvement. The Regulations stipulated that in accordance with the relevant funding standards and support policies, such as the average funding of students in similar public schools at the same level, local governments at or above the county level may give appropriate subsidies to non-profit private schools. The local government should give priority to supporting non-profit private schools by renting or transferring idle state-owned assets. It also stipulated that non-profit private schools should enjoy the same preferential tax policies as public schools. New or expanding non-profit private schools should be treated the same as public schools in terms of allocation of preferential land use. These provisions provided a clear basis for local Party committees and relevant departments to support the development of private education.

References Altbach, P. G. (2005). The private sector in Asian higher education. In P. G. Altbach & D. C. Levy (Eds.), Private higher education: a global revolution (Vol. 2). Sense Publishers. Central Committee of the Communist Party and the State Council. (1999). Deepening Education Reform and Promoting Quality Education. (In Chinese). (中共中央国务院关于深化教育改革, 全面推进素质教育的决定). Central Committee of the Communist Party. (2013). Decision on several major issues concerning the comprehensive deepening of reform. Beijing. (In Chinese). (中共中央关于全面深化改革若 干重大问题的决定). Guang, Sh. K. (2016). A General History of Educational Activities in China. Zhou Hongyu edited. Shandong Education Press: Jinan. (In Chinese). (中国教育活动通史). Li, D. X., & Luo, K., & Yu, H. B. (2012). The dilemma and countermeasure of the property right system of independent college under the background of transfer. Chinese Higher Education Research, 2012(10):76–79. (In Chinese). (转让背景下独立学院产权制度的困境与对策). Liu, X. (2018). The Development of Private Universities in Socialist China. Higher Education Policy, 33(2), 1–19.

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Liu, X., et al. (2021). For-profit or not-for-profit: What has affected the implementation of the policy for private universities in China? Higher Education Policy. Luo, L. M. (2014). Challenges in China’s private higher education and strategies. Ganging Daily, 2014-11-02(007). (In Chinese). (我国民办高等教育存在问题与应对之策). Luo, X. Q., & Fan, M. (2018).The logical rationality and practice point of the transformation and development of independent colleges. The Management of Higher Education, 12(05):54–61. (In Chinese). (独立学院转型发展的逻辑理性和实践指向). Ma, R. (2020). China’s private higher education: history and reconstruction. Social Science Literature Press, 2020(9):124–126: Beijing. (In Chinese). (中国的民办高等教育:历史与重建). Ministry of Education, Ministry of Human Resources and Social Security, State Administration for Industry and Commerce. (2019a). Regulations on the supervision and management of for-profit private schools. Retrived September 6, 2021, from http://www.moe.gov.cn/srcsite/A03/s3014/ 201701/t20170118_295142.html. (In Chinese). (营利性民办学校监督管理实施细则). Ministry of Education, Ministry of Human Resources and Social Security, Ministry of Civil Affairs Public administration for industry and commerce. (2019b). Private School Classification Registration Regulations. Retrived September 6, 2021, http://www.moe.gov.cn/srcsite/A03/s3014/201 701/t20170118_295142.html. (In Chinese). (民办学校分类登记实施细则). Ministry of Education. (1998). Action Plan for the Revitalization of Education for the 21st Century. Beijing. (In Chinese). (面向21世纪教育振兴行动计划). Ministry of Education. (2004). Notice on Cancellation of Higher Education Diploma Examination. Beijing. (In Chinese). (教育部:取消高教学历文凭考试). Ministry of Education. (2007). Several Provisions on the Management of Private Universities. Beijing. (民办高等学校办学管理若干规定). Ministry of Education. (2009). Number of higher education Institutions.Beijing. (In Chinese). (高 等教育学校(机构)数 (2009年)). Ministry of Education. (2013a). China education statistics yearbook (2011). People’s Press: Beijing. (In Chinese). (中国教育统计年鉴2011). Ministry of Education. (2013b). National statistical bulletin on the development of education. Beijing. (In Chinese). (2013b 年全国教育事业发展统计公报). Mu, Z. R. (2003). Research on China’s private economic development. Dissertation of Xiamen: Xiamen University, 2003:36. (In Chinese). (中国私营经济发展研究). National Bureau of Statistics. (2000). National statistical bulletin on the development of education. Beijing. (In Chinese). (2000年全国教育事业发展统计公报). National People’s Congress. (1982). Constitution of the People’s Republic of China, Beijing. (In Chinese). (中华人民共和国宪法). Pan, M. Y. (2005) Some problems of the reform of the property right system in our country’s universities—the issue of property rights in both public and private universities. Research on educational development, 2005(14):17–22. (In Chinese). (我国高校产权制度改革的若干问题—兼论公、 民办高校产权问题). Pan, M. Y., & Wu, D. G., & Bie, D. R. (2012). The third way of private HE development in China. Research in Higher Education, 4, L-8. (In Chinese). (我国民办高等教育发展的第三条道路). Qin, H. (2021). Firmly the direction of public welfare Lead and promote the sustained and healthy development of private education in the new era. Beining. (In Chinese). (坚定公益方向 引领推 动新时代民办教育持续健康发展). Qin, G. Z. (1990). A review of China’s private higher education in the 1980s. Journal of Shantou University, 6(2), 89–97. (In Chinese). (八十年代我国民办高等教育的回顾). Qu, H. Ch. (2001) Western radicals consistency theory and the privatization of world education are booming. Comparative Education Research, 2001(06), 37–41. (In Chinese). (西方激进派的"一 致性"理论与世界教育私营化的勃兴). Seven-party Institute of Education. (2016). Ranking of the number of private universities. http:// mjy.xaiu.edu.cn/info/1007/2218.htm. (In Chinese). (全国31个省市自治区民办高等学校数量 排名).

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State Council. (2010). Outline of the National Medium - and Long-term Program for Education Reform and Development (2010–2020). Retrieved September 4, 2021, from http://www.moe. edu.cn/publicfiles/business/htmlfiles/moe/moe_838/201008/93704.html. (In Chinese). (国家中 长期教育改革和发展规划纲要(2010–2020年)). State Education Commission. (1987a). Provisional Regulations on the Financial Management of Schools by Social Forces. Beijing. (In Chinese). (社会力量办学财务管理暂行规定). State Education Commission. (1987b). Several Interim Regulations on Running Schools by Social Forces. Beijing. (In Chinese). (关于社会力量办学的若干暂行规定). State Statistical Bureau. (2011). China statistical yearbook. China Statistics Press: Beijing. (In Chinese). (中国统计年鉴). Su, Y. Ch., & Lei, K. X., & Zhang, Y. L. (2013). A general history of education in China. Chinese Republic Volume. Beijing People’s University Press. Beijing. (In Chinese). ( 中国教育通史). Tao, H. (1996). A preliminary examination of the National Diploma Examination. Educational Science (04), 5–8. (In Chinese). (国家学历文凭考试初探). Wang, J. (2021). Build a protective wall for non-profit private school public welfare school. https:// baijiahao.baidu.com/s?id=1701435791790748217&wfr=spider&for=pc. (In Chinese). (筑牢非 营利性民办学校公益办学“防护墙”). Wang, L. F. (2008). The development trend of higher education in the world and its enlightenment. Research in Higher Education, 29(12), 12–17. (In Chinese). (世界高等教育发展趋势及其启 示). Wang, Y. T., & Liu, H. (2021). Dilemma, path and countermeasure suggestions for the transfer of public independent colleges. Fudan Education Forum, 19(03):81–88. (In Chinese). (公办型独 立学院转设的困境、路径及对策建议). Wei, F. (2002). International Encyclopedia of Educational Economics. Higher Education Press: Beijing. (In Chinese). (教育经济学国际百科全书). Xu Xuqing. (2021). Strengthen the policy basis of private education and development of teaching according to the rule of law. Retrieved 6, September 2021, from http://www.moe.gov.cn/jyb_ xwfb/moe_2082/2021/2021_zl38/202105/t20210521_532813.html (In Chinese). (夯实民办教 育发展依法治教的政策基础). Yang, X. Y., & Gan, G. H. (2009). Game analysis of the conduct of private universities. Academic Monthly Journal of Education, 2009(01), 56–60. (In Chinese). (民办高等学校办学行为博弈分 析). Zeng, H. (2012). An analysis of the privatization of higher education in China. Journal of Shaanxi Institute of Education, 2012(12), 12–13. (In Chinese). (中国高等教育私营化问题探析). Zhang, Sh. J., & Zhang, L. T. (2007). The history, achievements and problems of the policy construction of our national higher education. Heilongjiang Higher Education Research, 2007(12), 35–38. (In Chinese). (1978年以来我国民办高等教育政策建设的历史、成就与问题). Zhang, S. G. (2001). The policy of Private Higher Education is well investigated. Dissertation of Xiamen University. (民办高等教育政策研究). Zhang, X. (1993). Discussion on the introduction of market mechanism in higher education. Research in Higher Education, 1993(03), 15–17. (In Chinese). (高等教育引入市场机制之探 讨). Zhong, B. L., et al. (2010). Seizing the historical opportunity to resolve the deep contradiction to promote healthy development: The reform and development research of Private Higher Education in China. Chinese Higher Education Research 23, 11–14. (In Chinese). (抓住历史机遇化解深 层矛盾促进健康发展-我国民办高等教育改革与发展探析). Zhou, G. P. (2007). Review and reflection on the policies and regulations of China’s Private Higher Education after the reform and opening-up (1978—2006). Private Education Research 2007(05), 48–54, 108. (In Chinese). (改革开放以来(1978—2006)中国民办高等教育政策法规回顾与思 考). Zhou, Sh. L., & Zhao, Y. Zh. (2014). Study on the implementation path and strategy of classification management of Private Higher Education. Education Research (05), 58–64. CNKI: SUN: JYYJ.0.2014-05-009. (In Chinese). (民办高等教育分类管理实施路径与策略研究).

Chapter 4

University Governance in the People’s Republic of China

4.1 CPC Within National Bureaucratic System This section looks at how university governance operates in the People’s Republic of China. In order to understand this, it is necessary to understand how the CPC influences all institutions in the country. The CPC is the founding political party and the sole governing party of the People’s Republic of China. According to the Constitution of the CPC (CPC Central Committee, 2012) the most authoritative body of the CPC is the National Party Congress, which meets once every five years. When it is not in session, the Central Committee, which is elected by the National Party Congress, is the highest body to implement the daily duties. The CPC supports the implementation of policies at all levels of government so as to achieve national goals and establish an overarching ideological framework. This structure has clear lines of direction and accountability headed by the Central Committee of CPC, which then has subsidiary tiers operating at national, provincial, county, district, and local levels. All rural areas, government organizations, schools, communities, social organizations, and other basic units, where there are at least three full Party members, are allowed to form a Party group. These primary Party organizations are subject to approval by the higher level of Party organizations. In terms of the Constitution of the CPC, the Four Obediences are the fundamental principles of establishing the order of the inner life of the Party, which is explained as follows: . . . .

The party members shall be subordinate to the organization of the Party; The minority shall be subordinate to the majority; Subordinate organizations shall be subject to the higher-level organizations; All party organizations and all party members shall obey the Party’s National Congress and the Central Committee (CPC Central Committee, 2012).

These requirements ensure the unity of the whole party and make the party a well-organized and unified whole. With the power of the state, the CPC is directly © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_4

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Table 4.1 Hierarchical level of Chinese government departments Examples

Level

Chinese name

Premier & Chair of China

Level 1

Zhengguoji

Vice Premiers of the State Council

Level 2–3

Fuguoji

Leading roles of ministries or of provinces

Level 3–4

Zhengbuji

Assisting roles of Ministries or of Provinces

Level 4–5

Fubuji

Leading roles of departments or of prefectures

Level 5–7

Zhengtingji

Assisting roles of departments or of prefectures

Level 6–8

Futingji

Leading roles of divisions or of counties

Level 7–10

Zhengchuji

Assistant roles to divisions or of counties

Level 8–11

Fuchuji

Leading roles of sections or of townships

Level 9–12

Zhengkeji

Assistant roles of sections or of townships

Level 9–13

Fukeji

Staff members

Level 9–14

Keyuan

involved in social governance through its centralized leadership and its elaborate organizational mechanisms, as well as having an in-depth presence in all areas of social life. The parallel structure of the administration and the Party constitutes the basic organizational structure of the state’s system of power. The Party committee organizes some regular activities to unify the Party members. For example, the cadres of the Party attend a Democratic Reflective Meeting in which the cadres gather periodically to engage in criticism and self-criticism. There shall be no privileged Party members who do not participate in the regular activities of the Party organization. As Liu (2017) states, in the hierarchical system of Chinese government departments, every position becomes endowed with a special status and assumed value from Zhengguoji to Keyuan. For example, the Premier of the People’s Republic of China is in Level 1, which is called Zhengguoji, and the leading roles in ministries or their equivalents, and in provinces or their equivalents, are Level 3–4, which is called Zhengbuji. The appointment, promotion and removal of the administrative managers are controlled by the supervising authority. These hierarchical levels are illustrated in Table 4.1.

4.2 Governance of the Public University As a state institution, a public university adopts the same hierarchy for administrative management as its parallel government department. Public universities are primarily funded by the government and are affiliated with provincial education departments, a relevant section of industry, or more directly with the Ministry of Education. All these public universities are categorized into different levels with regard to their affiliated supervising authority. The status level of the Party Secretary and President

4.2 Governance of the Public University

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corresponds to the administrative level of the university. The hierarchical model identifies a corresponding level to an administrative position from top to bottom within the university management structure. For example Peking University is a ZhengbuJi Institution and provincial affiliated universities are ZhengtingJi Institutions. Based on this system, the managers of a university can transfer to the corresponding level of the governmental department as officials and vice versa. For instance, the level of President of a provincial affiliated university is ZhengtingJi, which is usually the same as the Director level of the provincial educational department; the level of Faculty Dean of this university, Zhengchuji, is usually the same level as a head county magistrate. Therefore, the managers holding the same levels theoretically could transfer with one another. This transferable positional level between the university and the government department also strengthens the bond between the university and the government. The Chinese university administrative system is based on official rank and authority in which the political perspective plays an important role, and the position of the President is an overtly political appointment. Their staff members usually have contracts of tenure, and the major part of their salaries comes from government funding. By this mechanism, the public university is strongly controlled by the State which continuously attributes funding to the university based on its number of students (Liu, 2017). Regarding the role of the CPC in the university, the Law of HE (National People’s Congress, 2015) states that The public university carries out the governance model of the Presidential Accountability System under the Leadership of the UCPC in which the UCPC is officially designated to play the core role of leading the university.

As the representative of the authority of the Communist Party, the UCPC is formally recognized as the highest authority within the university. It reports to a high-level Committee such as the provincial CPC. According to the Constitution of the Chinese Communist Party (CPC Central Committee, 2012) and the Ordinary regulations of CPC Central Committee on university committee (CPC Central Committee, 2010), the Secretary and Vice Secretary are elected by the UCPC and then examined and approved by the appropriate tier of the CPC. Within the Constitution of the Chinese Communist Party, every party member is organized into a branch or unit of the Party to participate in the regular activities of the Party’s organization including the Party member’s critical and self-reflective evaluation. As Liu points out, The UCPC follows this requirement by establishing Faculty Party Committees. Correspondingly, each Faculty Party Committee then sets up a Party Branch in all of its constituent units such as teaching and research departments, and administration. A Student Party Branch is established in each Faculty grade or, in cases where numbers permit, in subject class groups. (Liu, 2017, p. 272)

In this structure, the political and ideological system of the Communist Party is integrated with the administrative and management structures at each level of the university (Liu, 2020). Figure 4.1, from Liu (2017), presents the organizational structure of UCPC of the public university in China.

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Fig. 4.1 Organizational structure of UCPC of the public university in China

In addition, the CPC has established a variety of ancillary organizations forging links between the Party and the public, such as the Communist Youth League Organization (CYLO), which is responsible for leading youth movements and activities. Almost all students of universities are members of the CYLO which has become an integral part of the governance system within universities, taking a lead in ideological training among students. Thus, all universities are linked through a comprehensive organizational structure and are also linked with other social organizations in pursuing policy strategies for modernization and development. Thus a universitybased primary Party organization links to a structure outside of and beyond the university, and it is from this external source that its authority is derived. The private university is required to establish a similar structure and organization of the UCPC to that of a public university. However, as private universities in China are funded by non-governmental sources, they enjoy more autonomy than public universities. This will be discussed in detail in the next section.

4.3 Governance of the Private University In China, the government creates a regulatory environment that seeks to improve the development and regulation of the private university so that it can achieve its mission and meet the requirements of society. The principal laws relating to the private university include the Law of Higher Education and the Promotion Law of Private Education. These laws give rise to a number of policies and provisions that act to regulate private universities. Usually, the private university is evaluated when it applies to be established; this is called Setting Evaluation. After that the university

4.4 University Communist Party Committee

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needs to submit a range of self-inspection documents to the educational department including an annual audit report from a professional audit agency. It also has to undergo a site visit evaluation when it has the first cohort of graduates. This is called Quality Evaluation for the Cultivation of Talents of Vocational Higher Education. Then it must undergo the Evaluation of Teaching Level every five years. These evaluations provide the evidence needed to permit student recruitment and secure resources in the next few years. In addition, the state has control over the number of students recruited and the tuition fees charged. These are usually proposed by the university subject to the approval of the provincial education department. The student-staff ratio, basic conditions of student recruitment, compulsory curriculum, and degree requirements are required by the government. The university must submit a report on its financial management and use of its assets to the provincial education department. In terms of the regulations established by the Promotion Law of the Private Education, the institutional governance of private universities includes a Council, as the decision-making body, and the executive body, headed by the President. The UCPC plays the political core role to supervise the direction of the university. In addition, the University Constitution is required to be set as the running principle of the university. This regulated framework on the institutional governance of private universities forms the basic structure to explore the governance of private universities in the current study.

4.4 University Communist Party Committee Similar to public universities, private universities are required to establish a UCPC as the representative of the authority of the Communist Party. Differently, in terms of the Ministry of Education (2007) the Provisions on Running Management of Private University, the UCPC only plays the core political role in the private university rather than the core of leadership. The specifics of this political role and the responsibilities are explained within the document Opinions on Strengthening the Construction of the CPC in the private university (The Opinions) (CPC Central Committee, 2006) as follows. . To promote and implement the party’s route, policies, and the decisions of the higher Party organization, and to guide and supervise the university to abide by the laws and regulations. . To report the reasonable requirements of the college towards the higher Party organization and the related governmental departments. . To strengthen the construction of ideology, organization and system of the college Communist Party Branch and the management and education of Party members. . To lead the ideological and political work and moral education of the university. . To lead the Trade Unions, the Communist Youth League, the Student Union and Staff Congress.

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. To lead the work of the united front with Democratic Parties1 and to support Democratic Party organizations within the university to carry out their activities in accordance with the respective constitution. The role of UCPC in the private university is to focus on the ideological education of its members and to supervise the developmental direction of the university as required by the government. This document emphasizes that the Secretary of the UCPC is appointed by the Provincial level of the Party authority in education. The Ministry of Education (2007) emphasizes that the UCPC is responsible for the ideological and political education of the students and general student affairs. The channel to achieve the ideological and political education of the students includes their Party Committees from the university level to the faculty level and ancillary organizations such as CYLO as discussed in the last section. In addition, in China undergraduates are required to live together in university accommodation. Given this situation, thousands of students live and have meals on the university campus, which creates a space to lead different activities collectively and then to achieve this ideological education. As a result, this model places a heavy workload on the university. For example, of the 100 or so students who live in a typical accommodation block, conflicts owing to different personalities, living habits, or cultural backgrounds can sometimes occur. The sub-department of the UCPC is responsible for addressing these affairs. The Opinions (CPC Central Committee, 2006) further emphasize that the UCPC “improves the implementation of the Party’s education policy and ensures the socialist direction of the private university”. General Secretary Xi (2014, 2016) explains that adherence to the direction of the socialist university is the most distinctive characteristic of Chinese universities. Its fundamental requirement is to constantly consolidate the guiding position of Marxism in the ideological field of universities by propaganda and ideological work. This explains the political core role of UCPC. Figure 4.2 presents the role and responsibilities of UCPC in the private university. Regarding participation in the institutional governance, The Opinions (CPC Central Committee, 2006) asks the Secretary of UCPC as a member of the Council to participate in governance including development planning, personnel arrangements, financial budgeting, basic construction and other major issues. Correspondingly, the Communist Party members of the Council and the senior managers of the university can act as members of the UCPC. In addition, it emphasizes that the UCPC supports the university President in the exercise of their functions and powers based on related 1

There are other parties who also participate in the political system, and they accept the leading role of the CPC in national governance. These eight parties are Revolutionary Committee of the Kuomintang, China Democratic League, China Democratic National Construction Association, China Association for Promoting Democracy, Chinese Peasants’ and Workers’ Democratic Party, Zhigongdang of China, Jiusan Society and Taiwan Democratic Self-Government League. The basic principle of the cooperation between the CPC and the other parties is long-term coexistence, mutual supervision, sincere treatment with each other and the sharing of weal and woe.

4.5 University Council and President

71

Role

Political core

Responsibility

Ensures the implementation of the Party’s education policy Ensures the socialist direction of the private university

Secretary

Council member appointed by the Provincial level of the Party authority in education

Fig. 4.2 Description of UCPC in the private university

laws. The Opinions formally define the role of the UCPC and create a framework that makes the UCPC a sort of reserve authority that can intervene in institutional governance.

4.5 University Council and President The Promotion Law of Private Education (National People’s Congress, 2002) discusses the role of the Council in the governance of the private university. The private university sets up a Council or other forms of decision-making bodies and the President is appointed by this decision-making body. The Council consists of at least five members including shareholders or their representatives, president, and staff representatives. More than one-third of members shall have at least five years’ work experience in the educational field.

The responsibilities of the Council are made explicit in this law as, . To appoint and dismiss the President and amend the constitution and formulate regulations of the university. . To supervise the development scheme and approve the annual work plan of the university. . To raise funds for the university, review and verify budgets and final accounts. . To verify staffing size and income structures. . To decide the merging, termination and other important matters of the university. It is clear that the Council is the governing body of the private university. Based on this, the Ministry of Education (2009) emphasized that the President should “have a bachelor degree (or above) and senior professional title”. In 2013, some sections of the Promotion Law of Private Education were revised. In the new version, the President should be an educational expert with at least ten years of work experience in the HE field and be less than 70 years of age (National Congress, 2013). In 2016, the Decisions about Repealing and Modifying Some Regulations (Ministry of Education, 2016) added the terms of the President which asks the tenure of President is principally for four years and may serve consecutively. Each of these amendments reflects a balancing act by the government to introduce higher requirements in stages

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to minimize difficult situations relating to senior appointments from the past which no longer suit modern circumstances. On the responsibility and power of the President, it states as follows: . To carry out the decisions made by the Council and to be responsible for the daily administration of the university. . To execute the development plans made by the Council, draw up the annual work plans, financial budgets, and the regulations of the university. . To appoint, dismiss and reward staff and impose punishments. . To make arrangements for education, teaching and scientific research, and ensure the quality of education and teaching. . To execute other powers delegated by the Council. Therefore, the relationship between the Council and the President is regulated by the law in which the Council is the governing body to lead the President who is responsible for the daily management of the university. Furthermore, the regulations make explicit the relationship between the President of the university and the Council. The Interpretative Regulations on the Promotion Law of the Private Education (State Council, 2004) stipulates that the President independently exercises the teaching and administration without the interference of the Council. It points out that sponsors participate in the Council or other forms of decision-making body whose power is limited by the prescribed procedures and regulations of the Constitution and thus cannot arbitrarily intervene in the affairs of the university. These provisions ensure that the Council has the right to recommend the appointment of the Secretary of the CPC to the Provincial level of the Party authority in education. State regulations emphasize that the Council is the decision-making body of the private university while the President is in charge of implementing its decisions. As well as the leadership of the university, there is a group of senior managers, who are the executive body and are responsible for the daily operation of the college. The institutional governance of private universities makes clear that the positional power of the President originates from the Council and is limited by the Council.

4.6 University Constitutions As early as 1995, the Education Law (National People’s Congress, 2015) regulates that institutions must establish a University Constitution when registering with the official authority. The Outline of Education Reform and Development (2010) states that the Constitution is an important component of the modern university system. In 2011, the Ministry of Education released a document titled the Interim Measures about the formulation of University Constitution (The Interim). This is the first time that the Ministry formulated detailed guidelines for such constitutions. This document is explained as follows:

4.6 University Constitutions

73

The Constitution embodies the principle of autonomous governance, management and performance of public functions. It is the basis for formulating the internal management system, implementing teaching activities and developing the social links and cooperation of the university.

It emphasizes that the Constitution should regulate the procedures of decision making, the form of governance, democratic management, the academic system and the cooperative activities with other social organizations of the university. In addition, it should define the relationship of the sponsors, government departments and the university itself, to ensure the autonomy of the university. In other words, the Constitution is the autonomous management principle of the university. These conditions are designed to establish the professional, financial and academic integrity of the university. It defines the responsibilities and rights of the main stakeholders and integrates the mission and purpose of the university into the mechanisms and systems of daily management. Following The Interim document, in 2014, the Ministry of Education (2014a, b) released another document titled the Notification on Accelerating the Formulation, Approval and Implementation of the University Constitution. It emphasizes that the Constitution needs, . To reflect the requirement of the modern university system with Chinese characteristics and objectively describe the characteristics and positioning of the university. . To accurately state the relationship between the university and sponsor. . To regulate the internal governance of universities. . To strengthen the construction of the academic system in which the academic committee is at the core. . To standardize the exercise of the autonomy and supervision mechanism. . To comprehensively provide the basis and evidence for the university’s running and independent management. The Constitution thus provides the basic regulations for the running of the university. It is expected to become the general guideline for the institutional governance of the private university. Therefore, the present study will highlight the role of the Constitution in the institutional governance of private universities Central Committee (2006). Opinions on strengthening the construction of the CPC in the private university. It is noted that The Interim states that “the educational administrative department should guide and supervise the implementation of the University Constitution”. In other words, the government does not just approve the authority of the Constitution but also supervises its implementation.

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4.7 Differences of the Governance in Public University and the Private University There are several differences in institutional governance between private and public universities. The first is the role of the UCPC. In public universities, the UCPC forms the core, having both a political and leadership role, and is formally recognized as the highest authority. But, in private universities, while the UCPC is the political core, the Council is the leadership core. In particular, public universities are run under the presidential responsibility system under the leadership of the UCPC in which the UCPC is the most authoritative body. In contrast, in private universities, the Council is the most authoritative body and its decision making is heavily influenced by the investors. The second difference lies in the personnel system. Public universities have a bureaucratic structure, and every level of personnel has its designated administrative level which corresponds to the bureaucratic structure of government agencies. Public universities are public organizations/institutions. In fact, jobs in public universities offer more stability and possibly better benefits after retirement under current policies. Although private universities have their own internal administrative levels, these do not correspond with those of government departments. In a private university, the positional level of its administrative management does not equate to or transfer from the level of corresponding governmental departments. In other words, the position level of a staff member in a private university does not necessarily match with the relevant position in a state organization. Therefore, the positions of staff members in private universities are more easily changed with less government input required and this weakened boundary and flexible system allows private universities greater autonomy in organizing themselves. For example, a president of a private university with unsatisfactory work performance can be dismissed by the university Council whereas in a public university, the dismissal procedure is more complicated and has to be approved by the relevant departments of the CPC. In addition, this type of dismissal of the President is considered as one of the punishments about his work performance which is more serious in the public university.2

2 Regarding for-profit companies in China, the Law of Company [should this be plural? Law of Companies?] regulates four governance forms. (1) The Board of Shareholders is the highest authority. It consists of shareholders and their representatives, and the shareholders own the company. (2) The Council is the decision-making body of the company. The Council is elected by the Board of Shareholders to protect the interests of shareholders. (3) The Supervision Board is the monitoring body. It monitors the implementation of finance [what do you mean by ‘implementation’ of finance?] and the work of the Council and Senior Executive Team. (4) The Senior Executive Team is in charge of the daily management of the company. This team is employed by the Council. In addition, this law requires each company to establish a branch of the CPC to carry out party activities according to the provisions of the Constitution of the CPC. In stated-owned companies, the CPC is the governing body but in private companies, the Council is the governing body.

4.7 Differences of the Governance in Public University …

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The third is the sources of funds. Although both public and private universities show a trend of diversification in the funding sources, public universities are mainly funded by the government, while private universities receive the bulk of their money from tuition fees paid by students. The fourth difference is that the presidents’ power comes from different sources and thus belongs to different categories. The power of the president of a public university comes from their appointment by the government. In private universities, the Council is responsible for selecting and hiring the presidents, albeit ultimately subject to the approval of the provincial administrative department of education. The president of a public university, appointed by the government, which is in the national educational administrative power system, exercises certain administrative power and belongs to the category of public power. The presidents of private universities are selected and employed by the Council, and their power belongs to the category of private (non-public) power. In addition, public universities are run by the state, and, as a legal entity, their property mainly comes from the state’s financial input and donations. Any assets remaining after the closure or termination of the university also belong to the State, which makes overall arrangements according to the development needs of public undertakings. The duties and responsibilities of the Party committees of public universities, appointment of the president and his/her powers, management of the staff, and use of the funds for daily operations are all subject to the strict management and supervision of the Party and the government. Private universities, however, are run by individuals or social organizations other than state institutions with nonstate financial funds, and their legal entity assets come from social organizations or individuals’ input. Compared with public universities, the legal person of private universities has diversified sources of property and is a legal person with diversified investment subjects, so its property rights structure is relatively complex. At present, the legal provisions regarding the ownership of assets acquired during the lives of private universities and any remaining property after termination are still not clear. Private universities are less regulated by the government in the establishment of decisionmaking organs, the employment of presidents, the management of faculty and staff and the use of educational funds, enjoying greater autonomy, and the intervention of market mechanism has had a greater impact on their corporate governance structure (Fig. 4.3).

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UCPC

4 University Governance in the People’s Republic of China Public universities

Private universities

core of politics and

core of politics

leadership The most authoritative

UCPC

Council

Top decision making

by the university leaders

by the investors

is influenced heavily

who are appointed by the

body

government Administrative system

strong boundary and fixed

weaker boundary and flexible

system

system

Level of administrative

matches with the position in

does not match

personnel

state organization

Institutional governance

has less autonomy

has more autonomy

Legal person’s property

belongs to the State

relatively complex

Main part of the income

government funding

student tuition

Fig. 4.3 Comparison of institutional governance in private and public universities

References CPC Central Committee. (2006). Opinions on strengthening the construction of the CPC in the private university. Beijing. (In Chinese). (关于加强民办高校党的建设工作的若干意见). CPC Central Committee. (2010). Ordinary regulations of CPC Central Committee on university committee. Beijing. (In Chinese). (中国共产党普通高校基层组织工作条例). CPC Central Committee. (2012). The constitution of the Chinese Communist Party. Beijing, People’s Publishing House. Beijing. (In Chinese). (中国共产党章程(2012年)). Liu, X. (2017). The governance in the development of public universities in China. Journal of Higher Education Policy and Management, 39(2), 266–281. Liu, X. (2020). Institutional governance of Chinese private universities: The role of the communist party committee. Journal of Higher Education Policy and Management, 42(1), 85–101. Ministry of Education. (2014a). The notification on accelerating the formulation, approval and implementation of the university constitution. Beijing. (In Chinese). (教育部办公厅关于加快推 进高等学校章程制定、核准与实施工作的通知). Ministry of Education. (2014b). The regulations on Academic Committees of Universities. Beijing. (In Chinese). (高等学校学术委员会规程). National People’s Congress. (2002). The promotion law of private education. Beijing. (In Chinese). (中华人民共和国民办教育促进法). National People’s Congress. (2015). Education law of People Republic’ Country. Beijing (In Chinese). (中华人民共和国教育法). National People’s Congress. (2015). The law of higher education. Beijing (In Chinese). (中华人民 共和国高等教育法). Xi, J. P. (2014). The governance of China. Foreign Language Press.

Chapter 5

Theoretical Perspectives and Research Design

Whilst the circumstances of the cases chosen, and the practices observed, are not untypical, it is not here being claimed that these three case studies are representative of the whole sector. However, what can be learned from these cases can be used to understand a larger set of cases (Neuman and Robson 2012). Thus, the cases are selected for their potential power, through their similarities and differences, to illuminate how governance forms and processes develop and are enacted in practice. Following the discussion of the selected cases, the process of data collection and analysis is introduced. The data for this study comprises semi-structured interviews with senior managers in private HE sector and relevant documents from both the government and the university case studies. The thematic analysis used is outlined and the ethical issues that arose during the research are also considered in this chapter.

5.1 Theoretical Orientation 5.1.1 Governance Reflects Power Dynamics of Organization Governance regimes reflect power dynamics of organization (Neokleous, 2015). It is as Horvath stated that, a set of structures, regulations, rules, norms, standards, mechanisms, processes and practices—formal, informal and embodied—that both regulate, coordinate, steer, and/or orchestrate (inter)actions as well as (re)produce socio-cultural, economic and political relations and values… The scope is usually to achieve field specific, practiceoriented goals. (Horvath, 2017, p.9)

Regarding universities governance, it is more broadly defined than corporate governance (Shattock, 2006) and as “a conceptual shorthand for the way higher education systems and institutions are organised and managed” (Neave, 2006, p.4). © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_5

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In other words, it refers to how decisions are taken at different levels throughout the institution. University governance often refers to authority which stems from the contests between internal actors (Alison, 2020). In terms of Marginson and Considine’s (2000), university governance is, the determination of values inside universities, their systems of decision-making and resource allocation, their mission and purposes, the patterns of authority and hierarchy, and the relationships of universities as institutions to the different academic worlds within and the worlds of government, business and community without. (Marginson & Considine, 2000, p.7)

Similarly, Birnbaum defines it as, governance is the term we give to the structures and processes those academic institutions invent to achieve an effective balance between the claims of two different, but equally valid, systems for organisational control and influence. One system, based on legal authority, is the basis for the role of trustees and administration; the other, based on professional authority, justifies the role of the faculty. (Birnbaum, 2004, p.5)

The literature shows in the past 30 years that there have been substantial changes in internal governance processes and practices of the universities (Rowlands, 2019). Literature have found trends of the governance toward boardism along with the corporatization of university governance in response to funding constraints, marketisation, and policymakers’ quest for efficiency and effectiveness (Shattock & Horvath, 2020). With the influence of managerial governance modes increasing, decision-making is expected to be more responsive to the externally social environment (Middlehurst, 2013; Shattock, 2014). The power is in the Executive leadership like the president or vice-chancellor, supported by an expanded team of senior executives which have shifted greatly from academic leadership to strategic planning, marketing, and financial affairs (Brown & Carasso, 2013a, b; OECD, 2007). Executive leadership dominates the universities much more than the university council or the professoriate (Blackmore, 2014; Morley, 2013). Government requires to demonstrate performance outcomes and have a return on investment (Brown & Carasso, 2013a, b). Internal and external accountability have become more central (Stensaker & Harvey, 2011), both need to response to the widespread adoption of public-sector governance practices (Shattock, 2006). These shifts are reflected within university governance where managerial modes dominate more traditional forms including collegial or self-governance (Middlehurst, 2013). Neo-liberalism and New Public Management have influenced the governance of public sector, increasing the power of the executive and creating quasi-markets to aid in the allocation of resources (Austin & Jones, 2016; Shattock, 1999). The governing body is one of several governance mechanisms and other mechanisms include the legal regime, regulation, and market mechanisms. This in the context of HE includes professional indicators, audits, and rankings (Cornforth 2003; Horvath, 2017).

5.1 Theoretical Orientation

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5.1.2 Reasons to Choose Two Theories Both Eisenhadt (1989) and Abdullah and Valentine (2009) adopt the position that no one theoretical approach is sufficient to address the complex issues and problems of governance. The latter suggests using a combination of various theories. This multitheory approach has also been advanced by scholars like Lynall et al. (2003) and Christopher (2010). After reviewing the literature, two theories have been chosen to guide the process of data collection and explore the analysis. The reasons to choose these theories are listed below. According to the government document Promotion Law of Private Education, a private university in China is required to establish a Council or similar forms of decision-making bodies. The Council is responsible for appointing a President to take charge of the daily management (National People’s Congress, 2002). One of the key characteristics of Chinese private universities is that the shareholders hope to make a profit from their investment as “private universities in China are nonprofit organizations in name only” (Li & Morgan, 2008). The majority of private universities are permitted to operate on the basis of securing a reasonable financial return to investors (Tao & Wang, 2010; Wang, 2011; Wu, 2007; Yan & Lin, 2012). In this case, shareholders may employ professional senior managers as their agents to manage the university, or directly participate in the management of the university themselves. The role of shareholders and their relationship with senior managers will then be key factors affecting the form of institutional governance. Therefore, the analysis needs to use theoretical approaches that concentrate on the relationship between these two key elements of institutional governance. Second, the theory of principal-agent focuses on the relationship between shareholders and their agents. This theory is widely used in literature related to the governance of business (Austin & Jones, 2016). The key point of this theory is that the shareholder is the ‘principal’ who employs professionals as their ‘agent’ to be responsible for the daily running of the corporation. However, although the interests of these two elements diverge, both seek to maximize their own interests. The inherent tension between them can lead to difficulties in the development of the institution (Berezi, 2008; Donaldson & Davis, 1991; Jensen & Meckling, 1976; Smith, 1776). Since one of the key characteristics of Chinese private universities is that the shareholders pursue a financial return, the institutional governance of private universities resembles the governance of a corporation. In applying this theoretical perspective to the current study, the owner of the private university is the principal who employs the senior managers such as the President as his agents. Another theory that focuses on the relationship between shareholders and their agents is stewardship theory which offers a contrasting perspective (Shattock, 2006). This theory draws attention on analysing how managers exercise authority within the organizations they run (Jones, 1995). The key point of this theory is that even though some actions could lead to personal benefit to the manager, they tend not to adopt them from a sense of duty to the organization or its broader social aims (Etzioni, 1975). This theory posits that managers gain intrinsic satisfaction from their actions (Herzberg

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et al., 2011). Stewardship theory complements principal-agent theory by providing an alternative conceptualization of governance in a way that overcomes some of the limitations of principal-agent theory (Segal & Lehrer, 2012; Van Puyvelde et al., 2012). This study uses these two theories to mutually complement each other.

5.1.3 Principal-Agent Theory Principal-agent theory was first articulated by Adam Smith in the Wealth of Nations, first published in 1776, in which he states that in modern enterprises, the owners are the ‘principal’ who employ managers to work as their ‘agents’ (Smith, 1776). The basis of principal-agent theory is the separation of ownership and managerial authority. Shareholders are the key focus, separated from enterprise managers who function as agents for shareholders and work for their interests (Berezi, 2008; Donaldson & Davis, 1991; Jensen & Meckling, 1976). Weber (1978) notes a similar relationship in public bureaucracies in which political masters need to employ officials with specialized knowledge who are responsible for the management of administration but stand apart from their political masters. One of the challenges in this employment relationship is that the interests of principals and agents may be different. Berle and Means (1932) regard the interests of shareholders and managers as divergent; both seek to maximize their own interests. The inherent tension between the two can at times make it difficult for managers to work for the benefit of the shareholders (Jensen & Meckling, 1976). Moreover, managers could transfer the corporation’s profits to a subsidiary and obtain substantial rewards resulting in a conflict between shareholders and managers (Berle & Means, 1932; Van Puyvelde et al., 2012). Williamson (1996) argues that the shareholders are concerned with securing, . the maximum profit with reasonable degrees of risk for the company; . distributed profits to shareholders with appropriate apportioning; . company shares to remain freely marketable pegged with a fair price. When the manager does not act in the shareholders’ interests, shareholder activism will occur which aims to enhance shareholder value, putting pressure on the manager and daily management to improve the firm’s performance (Gillan & Starks, 2000; Guay et al., 2004). Figure 5.1 shows the meaning of principal-agent theory. The second concern is the information asymmetry in this agency relationship. As Lane (2008) observes, agents have professional knowledge of the daily management that the principal does not. Principals know neither the agent’s activities nor the extent to which they shirk their responsibilities. Therefore, the principal is hardly able to assess the effectiveness of the work of agents and whether these agents work in terms of the requirement of the principal. Applying this theory to the present study, the principals in a private university are shareholders and the agents are the senior managers of the Executive Team, such as the President. The shareholders employ people including the President who have

5.1 Theoretical Orientation

81

Fig. 5.1 Understanding of principal-agent theory

specialized knowledge of HE to be responsible for the management of university. However, the interests of shareholders and managers differ as they have different information about the development of the university which makes it problematic for managers to work only for the shareholders’ interest. Following this perspective, different forms of institutional governance might emerge so as to address these various interests. Figure 5.2 shows the application of principal-agent theory in relation to governance of private university. In this figure, the shareholder of the private university as principal hires the senior managers such as President as the stewards to work for their interest, but the senior managers have their own self-interest and there is asymmetric information between the shareholder and the stewards. In order to deal with the two challenges of information asymmetry, and different interests of shareholders and managers, a formal contractual relation between shareholders and senior manager needs to be established to clearly define their different responsibilities and rights (Davis et al., 1997; Jensen & Meckling, 1976). In this case, two contractual approaches can be adopted by the principal to govern the manager: behaviour-based and outcome-based contracts (Eisenhardt, 1989a, 1989b; Kivistö, 2005). In the first place, accountability monitoring mechanisms are adopted by the principal to monitor the behaviour of agents such as a clear budget system and set working hours. This aims to reduce the information asymmetry between the principal and agents. In contrast, the outcome-based approach places the accountability on the agents for the achievement of outcomes. For example, universities are rewarded for achieving goals aligned with the government’s expectations and desired outcomes such as research productivity and students’ employment ratio (Kivistö, 2005). These two approaches can be integrated into the articles of the formal contract of the agent. Although, in principal-agent theory, devising a comprehensive contract should not necessarily be costly, in reality the contractual costs may be large (Fama & Jensen, 1983; Hart, 1995). This is particularly the case when the contractual relations between shareholders and managers differ in practice from the original contract (Van Puyvelde et al., 2012). For example, the managers might act differently from that agreed in the contract because of unstable circumstances, their own interests or the contract itself failed to accurately predict the change in conditions during its tenure. Such arrangements may incur future unanticipated additional financial costs (Klein,

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Fig. 5.2 Principal-agent theory in relation to governance of private university

Crawford et al., 1978). As long as 80 years ago, Coase (1937) argues that when considering whether to break the contract, the question always is, will it pay to bring an extra exchange transaction under the organizing authority”? Coase explains that the costs of organizing within the firm need to be equal either to the costs of organizing in another firm, or to the costs related to leaving the transaction to be organized by the price mechanism, otherwise the extra exchange transaction would not happen because transaction cost is a key factor which the corporation always considers. Therefore, whenever contracts are incomplete and agency problems exist, corporate governance processes appear (Hart, 1995) and the Council plays a mediating role between the shareholders and their agents by balancing the conflict of their interests and establishing policy to address problems (Davis et al., 1997). Principal-agent theory offers insights into the relations between the shareholders and managers and lays a foundation for considering issues relating to the role of governance. Some scholars have combined stakeholder concept with principalagent theory to address these issues in corporate governance (Hill & Jones, 1992; Sharplin & Phelps, 1989). This paradigm envisages the corporation as a nexus of contracts between stakeholders who have different interests, forging a stakeholderagent equation, and is used to explain the different interests of shareholders and managers (Eisenhardt, 1989a, 1989b) in relation to the corporate governance (Clarke, 2004).

5.1 Theoretical Orientation

83

Williamson (2002) suggests that the values of the CEO significantly influence the salience of stakeholders in the daily management. As the only group of stakeholders who enter into a contractual relationship with all other stakeholders and directly affect the performance of the corporation (Hill & Jones, 1992), these senior managers must distinguish the different intentions of stakeholders and the goals of the corporation. As applied to present study, this position of CEO could be played by the President of the university who is the first person to be responsible for its daily running. However, principal-agent theory has been criticized by some scholars. First, Perrow (1986) argues that it over emphasizes the profit-orientation of shareholders and lacks detailed empirical support relying instead on theoretical generalizations. Second, it pays too much attention to the interests from the perspective of shareholders (Hirsch et al., 1987). The third limitation is that it tends to focus too intently on extrinsic motivations, such as measurable market reward, and neglects other factors that structure how a corporation operates. This includes the multiple motivations that exist within the whole workforce and in the communities in which the cooperation operates (Davis et al., 1997). A similar idea is proposed by Lane (2008) who points out that this theory focuses on a simple contractual relationship with usually one general goal, but does not account for how the principal and agent may have different optimization strategies. Segal and Lehrer (2012) also note that although principal-agent theory enjoys the “ontological status of a law of nature”, it is “a self-fulfiling prophecy: coercive controls create frustration and ultimately the very type of opportunism they were designed to control”. However, Eisenhardt (1989a, 1989b) considers although this theory ignores the complexity of organizations, it can offer insights into how enterprises operate internally in relation to aspects such as the uncertainty of outcomes, incentives, and risk. These above drawbacks are recognized in the current study. Therefore, stewardship theory will be used to give a contrasting but complementary perspective to explore the research questions. Some scholars have used principal-agent in the analysis of HE governance. Toma was considered as one of the first scholars to apply this theory to governance of HE. She notes that the structure of the Council of a university as the governing body “reflects the costs to politicians of allowing internal agent shirking” (1986). Other scholars have used this theory to discuss the relationship between the government and the university. They illustrate how the state, as principal, monitors, and funds its universities to ensure the universities are acting in the best interest of the state (Gornitzka et al., 2004; Kivistö, 2005, 2008; Lane, 2007; Lane & Kivisto, 2008). One example of how this works in practice is the way the government attempts to control universities by influencing or regulating what they do and how they do it (Lane, 2007; Sirat & Kaur, 2010), such as with the appointment of members of the Council (Lane, 2007). It is also often used in the internal management of the university. For instance, contracts are common among different stakeholders to assure their responsibilities to the university but also protecting their interests and to behave according to the rules. In this case, the employment of staff is governed by contracts of work, and students contract with a university to obtain an education (Lane & Kivisto, 2008). Liefner notes that in a university.

84

5 Theoretical Perspectives and Research Design The principal can be a ministry of science and education, the management board of a university, a president, dean, or department chair. The agents are those actors in HE, who receive assignments and funds from the principals (2003).

He points out a number of managers are simultaneously principals and agents. The studies listed above explain the principal-agent relationship in public university governance, but few studies are found that use this theory in the governance of private university. In particular, not much attention is paid to how this relationship develops when a third party is involved. In Chinese private universities, the UCPC represents the government involvement in institutional governance. Its activity may or may not change the relationship between the principal and agent in the context of private universities. Therefore based on, but not limited to this theory, the current study will explore how the shareholder as principal, the senior managers as agents, and the UCPC as the third party work together to form its governance in order to achieve the development of the university.

5.1.4 Stewardship Theory In contrast to the principal-agent theory, stewardship theory draws attention to the managers who are employed by the shareholder or owner to address authority and challenges arising during their work. The theory focuses on analysing how a manager exercises authority within the organizations it runs (Jones, 1995). Even though some actions could lead to personal benefit, these managers may feel unable to adopt them out of a sense of duty to the organization or its broader social aims (Etzioni, 1975). In such organizations, the decision-making structures permit social and environmental aspects to be taken into consideration rather than focusing solely upon financial concerns. This theory stresses the beneficial consequences for shareholder returns through unifying the needs and interests of shareholders and agents (Barney, 1990). The key point of this theory is that the manager would work for the interests of the organization and its broader social aims rather than for themselves. It argues that managers gain intrinsic satisfaction from their actions and the acknowledgment of their colleagues (Herzberg et al., 2011). One of the reasons is that many people value their self-respect and the self-satisfaction derived from a job well done more highly than material rewards (Bandura, 1991). In addition, the manager is highly committed to the mission of the organization (Prondzynski, Brotherstone et al., 2012). Some scholars have studied the application of this theory to the governance practice of corporations. If a stewardship relationship exists between both shareholder and manager, the potential performance of the corporation is maximized and vice versa (Davis et al., 1997). Donaldson and Davis (1991) observe this is particularly the case when the CEO also occupies the position of Council Chair and where there is no doubt about whose authority or responsibility is greater. If principals believe the agents will act in the best interests of the organization rather than serving their personal interests, the governing form will require less monitoring and more

5.1 Theoretical Orientation Table 5.1 Differences between the theories of principal-agent and stewardship

85 Manager

Principal-agent theory

Stewardship theory

Motivation tends to be Extrinsic rewards

Intrinsic interests

Aspiration with institution tend to be

Misalignment

Alignment

Relationship with principal tends to be

Contract and evaluation

Trust and authorization

empowerment to managers (Davis et al., 1997). However, exclusive reliance upon stewardship theory may understate the complexity of the organization particularly when the organization is large (Caldwell & Karri, 2005). The difference between the theories of principal-agent and stewardship has been discussed by various scholars. Davis et.al. (1997), for example, argues that the essential difference between these two theories is how they recognize the contribution of human motivations and attributes. With regards to agent theory, agents are seen as being motivated by extrinsic rewards such as commodities that can be purchased in the marketplace. In this case, the control mechanism is structured around the extrinsic motivation which creates financial incentives to discourage agents from acting in self-serving ways. Conversely, stewardship theory assumes that stewards are motivated intrinsically and are driven by the need for growth opportunities, achievement, affiliation, and personal satisfaction. Recognizing the danger of over-simplification of this discussion, the difference of these two theories may be listed in Table 5.1. In applying this theoretical perspective to the current research, the manageragents of the shareholders, such as the President and Vice President, are personally committed to the private university; in taking responsibility for their work they thereby gain intrinsic satisfaction. These managers value the self-respect and selfsatisfaction through the development of the university and their achievements at work. These in turn motivate them to work harder. If shareholders believe the President and Vice President are committed to the development of the private university rather than their own interests, they would seemingly delegate more authority to the managers in the daily management of the university. This steward relationship is shown in following Fig. 5.3. In this figure, the shareholder of the private university as principal employs the senior managers as the stewards. They empower and trust these senior managers who have intrinsic and extrinsic motivations to work for the interests of the shareholder. It is noted that the theories of principal-agent and stewardship raise a key issue of governance: the supervision of managers by shareholders and the delegation of authority by shareholders to managers. This study considers the institutional governance of private universities by using principal-agent theory to emphasize supervision, and stewardship theory to emphasize trust and authorization.

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Fig. 5.3 Stewardship theory in relation to the governance of the private university

5.2 Method 5.2.1 Qualitative Case Studies The characteristics of a qualitative study are appropriate to explore the research question of this study. The essence of a qualitative study is to illuminate why certain things happened in certain contexts (Schramm, 1971) and it can offer in-depth understanding of research questions (Ragin, 1989). The empirical work consisted of a series of interviews with individuals occupying positions relevant to the implementation of prescribed framework of private universities. In addition, a number of documents were consulted. As noted above, in China, working within the broad framework required by the Ministry of Education, the provincial level education departments formulate regulations relating to private universities, taking into account local social and economic development needs. Therefore, conducting the research within a single province allows for better exploration of the factors that influence policy implementation because all actors are linked to the same regulations and social and economic context. This study considers private universities located in the province of Sichuan in mainland China. Centrally located, Sichuan has a population of about 81 million (Sichuan Provincial People’s Government, 2020) and its 36 private universities (onethird of its total) place it in the top five provinces for prevalence of private universities (Ministry of Education, 2020). As this study explores the factors that affect the

5.2 Method

87

implementation of the policy, potential participants included policymakers, shareholders, senior managers, employees, and students. This study initially discussed the implementation of this national legislation with two employees and three students, but they were either not clear about the legislation or did not know much about the current issues of its implementation. As a result, interviews were confined to representatives of three key groups—provincial departments, senior university managers, and shareholders. The university managers were sampled from three different universities. The national education department evaluates private universities every three years based on a number of indicators, including the number of registered students, studentfaculty ratios, and graduate employment rate. These are then combined to produce the rankings. Three universities were chosen to represent institutions at the top, middle, and bottom of the rankings. A total of 31 participants were interviewed in this study including government officials, shareholders in private universities, senior managers, and managers across the three universities. Although it is acknowledged that these participants from three universities in one province cannot represent all private universities in mainland China, these informants have experienced the growth of private universities and have a rich knowledge of the challenges inherent in carrying out a new policy. Thus, they provide a perspective to understand the factors that affect the implementation of the policy for private HE prescribed frameworks. Participant recruitment used a snowball sampling technique. Four initial interviewees introduced further participants who, in turn, introduced others. Semi-structured interviews were employed in this study. Questions included, but were not limited to, the interests of different stakeholders, the motivations of private universities to operate as for-profit or not-for-profit, the biggest influence on governmental policy implementation, and the main challenges facing private universities in relation to the implementation of the prescribed framework policy. The first phase field work was carried out in 2014, and then again in 2016. After that, I kept in touch with key persons in the three institutions. In 2020, this study re-visited some participants. Interviewees were told the purpose and process of the interview, and all understood that they could withdraw from the research at any time without having to give a reason. All participants consented to the recording of the interviews, which allowed them to be accurately transcribed to text. In order to protect their anonymity, participants were only identified by a single letter of the alphabet in the analysis and subsequent papers written using this research. The Table shows the overview of the interview (Table 5.2). In addition, documents, as a rich source of qualitative data, can provide insight into practices (Reischl and Plotz, 2020), and provide the study with more information related to the contexts being explored (Schmoelz, 2020). In all, 24 documents including national and provincial documentation involving management and governance of private universities were examined for supplementary evidence. The below table shows the sources of data collection (Table 5.3). This study was carried out in accordance with the latest edition of the Ethical Guidelines for Educational Research (British Educational Research Association, 2014). The Ethical Concerns Form of this study was approved by the Research

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5 Theoretical Perspectives and Research Design

Table 5.2 Overview of the interview Position

Date

Minutes

The founding Council Chair (tenure 2003–2015)

CA1a: July 2014

80

CA1b: Feb 2016

40

CA1c: Sep 2020

50

Location

Gender

Office

Male

Office

Male

Office

Male

Office

Male

Case A CA1

University president and secretary of the UCPC

CA 2a: July 2014

50

CA 2b: Feb 2016

40

CA3

Full-time member of council

CA 3a: July 2014

70

CA 3b: Feb 2016

70

CA4

External member of council

CA 4a: July 2014

70

CA 4b: Feb 2016

70

CA5a: July 2014

70

Office

Male

60

Office

Male

CA2

CA5

Vice president for teaching

CA5b: Feb 2016 CA6

Vice president for employment

CA7

Vice secretary of the UCPC

Feb 2016 CA7a: Feb 2016

120

Office

Male

CA7b: Sep 2020

70

Office

Male

Office

Male

Office

Female

Case B University president and secretary of the UCPC

CB1a: Sep 2014

90

CB1b: Mar 2016

60

CB2

Vice chair of the council

CB2a: Sep 2014

40

CB2b: Sep 2020

60

Home

CB3

Vice president for teaching

CB3a: Sep 2014

60

Office

CB3b: Mar 2016

60

CB1

Male

CB4

Chief of the directorate office

Sep 2014

30

Office

Male

CB5

The chief of the development planning department

CB5a: Sep 2014

90

Cafe

Male

CB5b: Mar 2016

40 Office

Male

Office

Male

Case C CC1 CC2

The Council Chair Secretary of the UCPC

CC3

President

CC4

Executive vice president

CC1a: Aug 2014

25

CC1b: Mar 2016

35

CC2a: Aug 2014

70

CC2b: Mar 2016

80

Mar 2016

80

Office

Male

Office

Male

CC4a: Aug 2014

90

CC4b: Mar 2016

90

CC5

Vice president for teaching

Mar 2016

90

Office

Male

CC6

Vice secretary of the UCPC

CC6a: Mar 2016

70

Office

Male

CC6b: Sep 20

60

Cafe (continued)

5.2 Method

89

Table 5.2 (continued) Position

Date

CC7

Vice head for education of the County

CC7a: Aug 2014

CC8

Chief of educational section of the County

Minutes 50

CC7b: Mar 2016

40

Aug 2014

30

Location

Gender

Office

Female

Office

Male

Officials of SED O1

Vice director for HE

Jul 2014

70

Office

Male

O2

Vice director for development and plan

O2a: Jul 2014

40

Office

Male

O3

Division chief of the private education office

O3a: Aug 2014

70

Office

Male

O3b: Mar 2016

40

Vice chief of the HE division

Aug 2014

70

Office

Female

O4

O2b: Sep 2020

Experts and senior managers from other universities E1

A member of National Review Aug 2014 Committee in HE (He was a President of a private university)

70

Home

Male

E2

A member of Provincial Review Jul 2014 Committee in HE (He is a President of a private university)

70

Office

Male

E3

A Vice-President of a private university

Aug 2014

80

Cafe

Male

E4

A member of National Review Committee in HE (He was a Vice-Secretary of the UCPC of a public university)

Aug 2014

70

Office

Male

E5

A member of Provincial Review E5a: Oct 2014 Committee in HE (He is also a E5b: Sep 2020 President of a private University)

90

Office

Male

80

Cafe

E6

A national educational inspector Oct 2014 (He is also a President of a state university)

35

Office

Male

E7

A senior advisor of a private university (He is also a Dean of an Institute of Education of a public university)

70

Cafe

Male

E7a: Sep 2014 E7b: Mar 2016

60

E7c: Sep 2020

50

Note All are recorded

Ethics Committee at the Institute of Education, University College London in July 2014 prior to the commencement of fieldwork. Thematic analysis was carried out in this study and the below Table presents themes relating to data analysis in each category (Table 5.4).

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5 Theoretical Perspectives and Research Design

Table 5.3 Sources of data collection in this study Methods

Sources of evidence

Document analysis

National document, provincial document, and university document

Semi-structured interviews

Types

Times

People

Occasions

31 people on 52 separate occasions

Case 1 Case 2 Case 3

7 people on 14 separate occasions 8 people on 9 separate occasions 5 people on 13 separate occasions

64.5%

69%

Officials

4 people on 6 separate occasions

13%

11.5%

Senior managers from other private universities and scholars

7 people on 10 separate occasions

22.5%

19.5%

Table 5.4 Themes relating to data analysis Themes

Categorizes

1

Private university in China

Development of private universities in China

2

Relations between the government and the private university

3

Public university

4

Chinese social context

5

Institutional governance form

6

Council and shareholders

7

Executive team and president

8

Relation between the council and executive team

9

University communist party committee

10

University constitution

11

Independent college

12

Challenges of cases

13

Stakeholders

Institutional governance of private university in practice

In the following writing, those with D represent data from documents and those given a C are interviewees from the three case study universities. The three universities are categorized as A, B, and C; an informant from each case is identified with a number in which 1 means the first informant, 2 means the second, and so on. CA1-4 thus indicates data from the first informant of university A about the fourth theme. The interviewees who are officials from the government are called O1 to

5.2 Method

91

O4; experts are called E1 to E7. The documents are categorized as G and C where G means document from government and C means document from the university. Similarly, documents from both government and case universities are identified with a number in which 1 means the first document, 2 means the second, and so on. For example, D-G1 means data from the first government document. Similarly, D-CA1 refers to information from the first document of Case A. These indexes are shown when referring to the statement of both interviewees and documents in the following chapters.

5.2.2 Brief Introduction of Case A Case A university commenced in 1998 when a commercial company involved in education cooperated with a public university to establish a private college to offer degrees and diplomas in subjects predominantly relating to information and technology. I was able to interview the person who was President of the public university from 1996 to 2004. During this period the university cooperated with different private organizations to establish 20 private colleges of which Case A was one. He explained how the first private college emerged from the province. In 1996, we realised that there was a considerable gap between the demand for and the provision of talent in some industries such as IT and Media. We wanted to develop these subjects but had no specialized teachers, facilities or budget, unlike some private organizations such as training institutions. As a public university we had good social esteem, plenty of experience of running HE, and teachers of national compulsory courses1 which the private training institutions lacked. In contrast, they had flexible management mechanisms—only employing staff as needed rather than providing lifelong tenure—as well as access to various fundraising channels. We thought by combining these two strengths, a good model for a college could result. We reached an agreement in which the public university would manage courses, provide the teachers of national compulsory courses and award diplomas; the private organization would take charge of fundraising and daily management. At that time, some colleagues said we sold the diploma to earn money for ourselves (senior managers). It was a hard time, but the facts illustrate that we made the right choice at that time (CA4a-1).2

This interview shows how a group of innovative and farsighted senior managers were able to introduce new educational programmes. In Case A, the commercial group withdrew cooperation in 2000 due to cash flow problems that the group was facing. The public university however established an investment company to deal with matters arising from the termination of the agreement and invited other potential investors to cooperate in the college. This college continued to run and the Council Chair of the investment company acted as the college’s Council Chair. By 2008, 1

In China some modules are required as compulsory modules in all subjects by the Ministry of Education including PE, ideological and political education, and English. 2 Quotes from the data are coded to identify the source, e.g. CA4a-1 and D-CA21 and the meaning of these reference codes are as explained in Chap. 4.

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given the existing teaching facilities, management team, and staff, the investment company applied to register with the government as a private university. In 2015, the founding Council Chair moved to another organization and the largest shareholder took over the role of Chair. A second campus was established in another city and in the same year recruited its first cohort of more than 2600 students. According to all interviewees from Case A, the shareholders of Case A have not received any financial return since the establishment of the university as all profits were reinvested in the university’s infrastructure including the new campus.

5.2.3 Brief Introduction of Case B In 1997, eight retired artists raised money in the name of one of their work units, from themselves and their relatives found a media college within a public university. Most of them were senior professionals in the media. Initially the new college provided Adult HE and ESHE,3 and recruited only part-time students. In its first year, there were just 30 students. During the initial period, the founders debated a lot since they had a number of different opinions about how to run the college, and they employed three different Deans between 1997 and 1998. With the unexpectedly low student enrolment and unstable leadership, two-thirds of these retired artists became worried about the loss of their investment and withdrew from the project. In response, the Dean found another sponsor she hoped would replace the original investors. The potential sponsor had managed a number of training programmes for the unit where she worked. In 1998, the potential sponsor took over all the college’s debts and two-thirds of the retired artists were able to withdraw their investment. With fewer shareholders, the senior management team was reconstructed. The new sponsor became Council Chair, the previous Chair, the faculty leader and a new recruit formed the Council membership. The Council participated in the daily running of university. In 2001, the President who later had held the position for 15 years participated in the senior management team as the Executive Vice President. By this time the college had 120 part-time students. The college then applied for permission to recruit fulltime students and was able to recruit 214 full-time students in the first year. After that, this college recruited a number of professional senior teaching staff and invested in advanced technical infrastructure. The aim was to improve the teaching quality in preparation for attracting more students. In 2003, land was purchased to enable the construction of an independent campus rather than continuing to rent space and facilities. In the same year, Opinions on regulation and strengthen management of Independent College Sponsored with New Mechanisms and Models from State Universities was published (Ministry of Education, 2003). In this document, private colleges were

3

This education style was introduced in the section of the private universities of Chapter two.

5.2 Method

93

encouraged to become Independent Colleges with their own campus and infrastructure, while teaching and management remained within the supervisory framework of a public university. Such colleges could take advantage of the reputation and resources of their affiliated public university to start operating as a self-financing entity charging a higher tuition fee than that of the parent public university. This type of Independent College mainly recruited students whose academic scores were lower than those required for the same type of course awarded by the public university. Given its background, the college applied to be an Independent College affiliated to a public university in 2003. With this status it could recruit students, award diplomas, have independent control of finance and become a legal entity enabling it to accept civil liability. From 2008, the government encouraged Independent Colleges to separate from their mother public universities and seek registration as private universities. Case B finally registered as a private university in 2013.

5.2.4 Brief Introduction of Case C The Council Chair graduated from university in 1981 in the first cohort to graduate when the National Recruitment Examination for University was reinstituted in 1977 following the Cultural Revolution. Following the Distributed Job Package for University Graduates,4 he was allocated work as an ordinary staff member at the County Agricultural Bureau. In 1980, the China Central Agricultural Broadcasting and Television School5 was founded. A branch of the School was established in the county in 1983 as there was a great need for skilled agricultural training in the rural areas of China. The Chair was requested by the County Agricultural Department to take on the management of this school and by 1992 this school had 6,000 students. In the beginning of 1990s when the ‘Socialist Market Economy’ was proposed which encouraged industries to reform and open up, the President felt it would be beneficial to transform the school into a vocational middle school to train skilled bluecollar workers for industries such as computing, catering, construction, and machine engineering. In 1994, this school was changed into a vocational middle school and its ownership transferred from the County Agricultural Department to private hands. In 2011, based on the school’s achievements,6 the owner applied to establish a private university, herein known as Case C. The owner then became the Council Chair and his son and three relatives were the other Council members. His son is 4

This regulation came into force in 1949 and was part of the ‘planned economy’ by which the government assigned jobs to university graduates based on the production and output requirements. These initiatives created a policy environment for the development of private education. 5 China Central Agricultural Broadcasting and Television School consists of one central school, a number of branch schools and teaching stations from provincial, prefecture and township and village level. It is responsible for farmers’ training about agricultural technology and the main teaching model is distance education and training. It is now called the Open University of China. 6 The vocational school still continues after the university was established on another campus. It now recruits over 3,000 students each year who have graduated from junior higher school.

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the Secretary of UCPC and is responsible for the daily running of the university; the senior manager team has no professionals from HE sector. This form of governance remained until 2015 when a full-time professional President was employed.

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Chapter 6

Governance in Practice: University with a Disjointed Council and Executive Team: Case A

Extract from field notes of the visit on February 24th, 2016 During the three-day visit, I interviewed senior managers in their respective offices. The interviews which followed the schedule sent to them in advance all ran well and without delay. All their offices and office desks were neat and organised. On the last day I went to the new campus on the university bus with other staff members to interview the Vice Secretary of UCPC who I did not have the chance to interview in 2014. I then had lunch with him in the student café. During lunch, the manager of student affairs said 30 prospective students were visiting the campus. So I accompanied these students to see the teaching facilities, theatre and accommodation and was impressed by these advanced facilities.

6.1 Council and Shareholder The form of governance derives from their previous experience in which the Council, as the governing body, decides on the university’s direction and development strategy. The role of the Council is defined by the University Constitution as follows: . To employ the members of Executive Team, financial manager, and principals of sub-organizations of Council and to decide their wage level; . To recommend the Secretary of UCPC for a position within the provincial CPC and to decide upon the termination or merger of the university; . To approve the organization of faculties and the staff distribution system; . To approve the University Constitution, the regulation of the Executive Team, the university’s middle and long-term development plans and annual plan; . To approve the financial budget and final accounts, to organise the annual financial audit and raise the funds needed by university (D-CA1). It is noted that here the Council is mainly responsible for employing the senior managers and establishing the regulations to supervise the senior managers’ implementation of its decisions. The Council Chair said © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_6

99

100

6 Governance in Practice: University with a Disjointed Council …

Table 6.1 Council member of Case A 1

Position

Identity

Work type

Work background

Age

Chair

Shareholder representative

Full-time

HE

45

2

Member

Shareholder representative

Full-time

Enterprise

44

3

Member

Shareholder

Part-time

Enterprise

60

4

Member

Shareholder

Part-time

Enterprise

62

5

Member

Shareholder

Part-time

Enterprise

52

6

Member

President

Full-time

HE

46

The Council first considers how the university achieves its designated goal by organizing different resources, and supervises the implementation of the Executive Team (CA1a-6).

The main concerns of the Council are to organize resources and supervise the implementation of decisions. The President is responsible for the daily operation of the university with the support of the Executive Team, of which he is the head. This form is called the Presidential Accountability System under the leadership of the Council.1 In it, the Council is the highest decision-making body and plays the leading role in university governance. When the new investment company took over the college in 2002, the Dean was appointed by the affiliated public university. Two years later the Council asked the university to appoint a new Dean, and agreed to change the articles of the Constitution so that in future the Dean would be appointed by the Council rather than the public university. When asked why a new Dean was requested, one of the Council members explained. Neither Council nor staff was pleased with the Dean because he was unable to improve the development of the college as the Council wished and also did not meet the interests of the staff (CA1b-6).

The new Dean cooperated well with the Council and the internal management mechanisms improved. Since then the governance and senior management have remained stable. Once the university was registered in 2009, the Council appointed the previous Chair and Dean as the university’s founding Council Chair and President respectively and recruited its first intake of 2,600 students. The inaugural Council members are as Table 6.1 shows. One Council member noted that We (Council members) are in different cities and often communicate by phone rather than sitting together in a room to have a meeting other than for especially significant issues (CA3a-6).

The Council believes the financial health of the university is one of the most important indicators reflecting the Executive Team’s achievements, and invites an independent third party to undertake the supervision of financial matters. 1

In Chinese: 董事会领导下的校长负责制.

6.1 Council and Shareholder

101

The university is required to accept the annual auditing of the professional accounting institution invited by the Council (CA3a-8).

However, the Chair expresses the potential risks involved when the shareholders do not participate in the daily running of the university. If the financial scheme is not appropriately carried out, the Council would not know until the final account (CA1a-8).

The concentrated authority of the President could result in contradictions. For example, the Executive Team led by the President might think they can master everything and the importance of shareholders could be neglected. If they do not communicate, as time goes by, distrust might accumulate between the shareholders and the Executive Team (CA3a-7). This clearly shows an asymmetric sharing of information between the Council and the Executive Team. In particular, as the Council is not involved in the daily management of the university, it lacks a understanding of the university’s operational functions. The Council Chair is appointed as the representative of the shareholders, and is elected by the Council. He is the legal representative of the university. The main responsibilities of the Chair according to the Council Constitution are as follows: . To abide by the relevant government laws, policies, and regulations and to conscientiously carry out the Council Constitution; . To lead the work of the Council, convene the Council meeting and carry out decisions of the Council; . To nominate the candidates for President and Vice President, which are then discussed by the Council (D-CA2). As well as being responsible for the Council’s daily operations and coordination of all its affairs, the Chair is also in charge of nominating the senior managers. An implication here is that the Council Chair is a key person to carry out the task of the Council and to connect other Council members with the Executive Team. The public university to which Case A was affiliated before it was established in 2008 is one of its current shareholders and the Chair acts as its representative. He is trusted by other shareholders and praised by the members of the Executive Team. On the Chair’s performance of his job, the President said When we transferred the assets of shareholders to the name of the university, some shareholders disagreed with it considering the potential risk.2 The Chair persuaded each of them and they finally agreed the transfer of assets (CA2a-6).

On the relationship between the Chair and the President, a Council member said The Council Chair is one of the founders of the university and is experienced in the management of HE. He trusts and awards enough authority to the President who is also an experienced professional in the HE field. They both communicate well (CA3a-6). 2

The transfer of the assets from shareholders to the name of the university is one of the biggest issues because of the expensive tax of transfer fee and that legally these assets cannot be withdrawn until the university closes.

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6 Governance in Practice: University with a Disjointed Council …

The Chair describes his work as follows: As the Council Chair, sometimes you must make a prompt decision. It is a challenge because you cannot judge things in terms of your personal feelings, but the objective facts (CA1a-4).

In 2015, the biggest shareholder took over the role of Chair after the founding Council Chair left. Regarding the ways in which the change of the Council Chair affects the institutional governance, the President said We (the new Chair and senior managers) currently cooperate well and you know it will take time to have a deep understanding with each other (CA2b-8).

In fact the change of Chair did not negatively affect the university. While the founding Chair had a degree in Education and had worked in the HE field for many years, the new Chair had studied business management and had worked in business enterprise throughout his career. A Council member noted the differences between these two Chairs, The founding Chair emphasized teaching quality more and the new Chair emphasizes stateof-the-art facilities more. Whatever we purchase, he asks to have the best quality (CA3b-6).

The Vice President said The new Chair asks that every procedure should be strictly carried out by signed process but the previous Chair could be informed by phone in advance and he would sign the document later (CA5b-6).

Their different educational and work backgrounds affect their views of the role of the university. As the first Chair was the shareholders’ representative their concerns needed to be considered carefully. The new Chair is the biggest shareholder and has considerable influence especially when it comes to procurement of materials and investment decisions. He has, for example, asked that all the facilities acquired for the new campus be better than those of other private vocational universities. The established system is recognised by both shareholders and managers and is also continually improved in practice. Based on this existing system, who is the Council Chair is not the key to affecting the internal governance (CA1a-6).

In 2015, the Council recruited two external members in order to widen its expertise. A Council member said The external members have excellent reputations in the HE field. The Council Chair and President often communicate with them. We plan to invite more experts as external members in future years (CA3b-6).

Previously, when only one member of the Council was not a shareholder, it was inevitable that the interest of the shareholders dominated the decision-making process. The inclusion of external members with considerable experience in HE improved the Council’s ability to consider the interests of different stakeholders in terms of the mission and goals of the university.

6.2 Executive Team

103

6.2 Executive Team The responsibility of the Executive Team covers teaching and administration, student recruitment, staff employment, curriculum affairs, and cooperation with other social organizations. The identity of the Executive Team is defined by the University Constitution as follows: . In order to ensure the implementation of the current governance and the sustainable development, the university sets up the Executive Team to be responsible for the daily management of the university. . The President is in charge of chairing the Executive Team and making decisions on the basis of a full deliberation and collective discussion of members. Issues, where there is a large divergence of opinion, can be submitted to the Council to make the final decision (D-CA1). When I undertook my first period of fieldwork in 2014, the Executive Team had five members, four Vice Presidents, and the President. All of them worked full-time, had senior professional titles in different subjects, and were in charge of different departments connected to their professional expertise, for example, Administration or Academic Development. Apart from the President, the other members also acted as the Deans of different faculties. All members of the Executive Team accepted annual and tenure work assessments and financial audit from the Council. The members of Executive Team are listed in Table 6.2. The Executive Team has considerable autonomy in personnel and finance matters. The President described how, The daily management is independent without the intervention of the Council. This includes entire autonomy for the employment of the staff and management of finance (CA2a-8).

The Executive Team meets every two weeks to take decisions on daily management. A Vice President said All important things are discussed in the meeting of the Executive Team, which avoids the potential for the President to grab all the power and abuse his authority (CA6-7).

The senior managers assert that the Council actively supports the strategies proposed by the Executive Team Table 6.2 Executive Team of Case A Position

Profession

Work background

Age

1

President

Professor

HE

46

2

Vice president

Associate Professor

HE

48

3

Vice president

Senior engineer

Enterprise

45

4

Vice president

Professor

HE

48

5

Vice president

Associate Professor

Enterprise

50

104

6 Governance in Practice: University with a Disjointed Council …

Most actions we take get the support of the Council. The decisions about these actions are repeatedly discussed by the Executive Team and benefit the development of the university. This is also consistent with the interests of the shareholders (CA2a-8).

Whether the university provides a platform to realize their professional and personal ambitions is an important element that affects the work of senior managers. The senior managers care more about whether the college can provide a platform to achieve professional status and recognition than wages (CA7-7). I feel a sense of achievement when a number of deans and teaching teams have grown in their professional work and subjects by our common endeavor (CA5a-12).

The mutual cooperation of senior managers is an important factor in influencing who the Council invites to join the Executive Team The members of the Executive Team should have both ability and integrity, and consider the development of the college as their own business. Even if someone is appropriate for the position of Vice President, if he cannot cooperate with the whole team, we would ask him to leave (CA1a-7).

In the development stage from 2009 to 2015, the turnover rates of the Executive Team remained relatively low. One founding member went back to a public university and one member who was recruited in 2010 left in 2012. The effect of senior managers’ leaving was talked about by a Vice President. The main effect is related to the department’s need for familiarity with the personality and work style of new managers and that the position of President has been filled by the same person is the key element to the university (CA7-7).

In 2015, the Executive Team added a new member who previously was the manager of the vocational office of the SED. I am familiar with the management of vocational education and I have kept a good communication with both Council Chair and President in past years. When they invited me to work here I am glad to come (CA6-7).

Previous understanding and trust between managers were also important in affecting the willingness of managers to work together. In order to tie the interests of the senior managers and the university closer together, the Council asked all senior managers who had an authorized position in a public university to resign from the public university. As was introduced in Chap. 3, when employed by the government every position is linked to the wider sphere of hierarchical arrangements in which a person would progress up various levels. If a senior manager in the private university failed to make progress, they could always return to a public university, or other government institution, to work in a different job but at the same level. In Case A, one senior manager chose to return to the public university but all others stayed with the private university, thereby giving up the possibility of a future job in a government department. This soon became well-known among other members of staff, and had a positive impact on improving their confidence in the future of the university. They could see that the “senior staff did not have a route of retreat so will pay all their attention to the university” (CA5a-7).

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These senior managers separated the personal relationship with the public institution; shareholders transfer the property rights of assets into the university. It means all their interests bond them to the university and everyone will gain or lose interest collectively (CA1b-8).

It is important that both the Council Chair and the President understand that different requirements can be united to benefit the development of the university. As the Council Chair said If the university develops successfully, the shareholders can get a good financial return and the senior managers will have a good career platform (CA1a-13).

Both the Council Chair and the President emphasized that the private university is a community of interests in which the shareholders, the senior managers, the students, and the government collectively gain or lose their interest rather than one wins at the expense of another’s loss. They recognized that the successful development of the university is achieved by the acknowledgement of the different interests of stakeholders. According to the University Constitution, the President is the chief person in charge of the daily operation. His responsibilities include . The comprehensive work of the college includes teaching, research, students’ affairs, and daily operations; . Drafting and implementing the annual work plan and budget; . To set and approve the college’s internal regulation; to employ or dismiss the staff who are not employed by the Council; . To draft and carry out the scheme of department positions and allocation of staff; . To report on the work to the Council and sign different documents on behalf of the university (D-CA1). Within these regulations, the President carries out the decisions of the Council and is responsible to the Council. The President has thought a great deal about the university’s development. Usually, the important decisions are first agreed in the Executive Team and then conveyed to different departments. Last year we had income distribution which confronted some resistance and complaints of part of employees. In this time, his perspective and capability is important so as to make the right judgment (CA3a-7). The President has strong administrative ability. He worked in a public university for many years which enabled him to accumulate rich administrative experience and has many ideas about the development of the college (E5-7).

In the process of implementing decisions, opposition can occur; whether they can be carried out smoothly largely depends on the President’s capabilities. This shows the importance of the President in the daily running. The Chair said In our Council, the President is an Ex-Officio member the Council and they need to ask his opinion in the decisions they makes (CA1a-6).

The Chair noted that the President has a greater understanding of the practical operation of the university than the shareholders and has a strong voice on the Council.

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The Council Chair and the President were classmates and worked for many years in the same university, and since being appointed to their respective positions they have sustained a good working relationship. The Chair comments that building trust between the Council Chair and President is a long and hard process. There are different aspirations between the Council Chair and the President. The President requires a high wage, which the shareholder might think does not match his work; or the President requires more power in finance and human resources but the shareholders do not trust the President (CA1a-13).

Since the Chair is the shareholders’ representative, the different requirements of the shareholders and the President may result in difficulties between them. If a Chair distrusts a President he can begin to intervene in the university’s daily operations, leading to possible conflict with the President. The way to address the potential for contradictions is to establish a system that keeps the Council closely informed of university operations and ensures its supervision rights. The Council can establish a system and model to understand the operation of the college such as an annual summary, auditing and evaluation (CA2a-8).

In 2015, the Council handed over responsibility for the annual evaluation of the Executive Team members to the President. Thereafter Executive Team members sign annual work assignment contracts with the President and similarly, the President signs his annual work assignment contract with the Council. The Council considers that I understand each member’s work performance so it now asks me to be responsible for evaluating their work performance. After that I report the evaluation outcome to the Council (CA2b-7).

The evaluation is an important determinant of salary levels and whether employment contracts are renewed. It is obvious the Council has given the President greater authority. The President keeps exploring different ways to enhance the capacities of the members of Executive Team including rotating their responsibilities. A Vice Secretary of the UCPC said, This will allow us to observe how colleagues cope with the challenges that we might not have thought about, and to understand each part of the university better (CA7-7).

In 2015, the President initiated a range of institutional reforms of administration and teaching. He expanded the teaching advisory committee by inviting a number of well-known experts in the educational and professional field from different provinces to be available for consultation when the university confronts problems. As noted, in 2015 the Executive Team established an independent internal evaluation department which is responsible for evaluating the implementation of the budget and the decisions of the Executive Team.

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6.3 University Communist Party Committee The UCPC was established when Case A was founded in 2009, and the President appointed as its Secretary. Initially, the Party Committee focused on the students’ ideological education and the promotion of student Party members. In the first month of the new branch in 2009, many students asked how they could become a Communist Party member so this became our primary work in that time (CA7-9).

In the beginning, in order to meet the requirements of ideological education, all departments established the Party organization. By 2013, 65 per cent of employees and 10 per cent of students were members of the Communist Party. Each academic year, the Party members in the various departments arranged talks for staff and some of the students who are facing either financial or academic difficulties. These conversations are an important means of understanding ideological trends and existing contradictions between staff and students. Usually, many queries about the university can be explained during these discussions, which also enable department leaders to hear the views of staff and students. As the Vice President for teaching said The first assignment of the UCPC is to ensure the university adheres to the direction of socialism by carrying out the regulations of the CPC and its laws. The second is the construction of the Party including to develop new Party members. The third is the ideological and political education of all staff and students (CA5a-9).

This informant considers that the role of the UCPC is consistent with government regulations introduced in Chap. 3. The UCPC also organizes a Party Committee Conference every summer and winter at which managers of every department discuss government policies on private education, strategic plans and the direction and goal of the university. This meeting is important to help staff to understand the direction of the college and also to unify the thinking on our work’s purpose. Many important reforms for the college originate from this meeting (CA7-9).

As for the role of UCPC in governance, the President stated that The joint meeting of the Executive Team and CPC is the highest executive body of daily management. Usually, it is held once every two weeks and I chair this meeting (CA2a-9).

In 2014, the university codified the procedure for the joint meeting in the document Regulations on Joint Meetings of Executive Team and UCPC. It details the attribution, preparation, and participants for the meeting, . The President decides the content of the meetings. . The fixed participants are the President, Vice Presidents, Secretary and Vice Secretaries of UCPC, and the Manager of the Office of President and Executive Team. . The flexible and temporary participants depend upon the content of the meeting (D-CA2).

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The joint meeting of the Executive Team and UCPC is the most authoritative body as regards regulations; topics discussed cover all the tasks involved in daily management, including the adjustment of personnel, student recruitment, teaching, and research. The President serves as the Secretary. The President and the Secretary are the two key members of the Executive Team and the CPC. When both these positions are occupied by the President, he becomes the most authoritative figure in daily operations. In addition, one of the Vice Presidents is the Vice Secretary of the UCPC. The UCPC committee office is shared with the Executive Team office, with one manager. Discussing the advantages of such a centralized structure, the Chair said The concentration of power and position reduces the amount of internal conflicts and improves the efficiency of the work. This is particularly important in the early stages of the university (CA1a-9).

The objective of the UCPC is to ensure that the university adheres to the direction of Socialism by following the regulations of the Communist Party and its laws, supporting the Party and encouraging Party membership, as well as organizing the ideological and political education of all staff and students. As the Vice Secretary said The UCPC plays an increasing role in the internal governance through the ideological and political education of both senior managers nowadays (CA7-9).

A Democratic Reflective Meeting introduced by the Vice Secretary, is a good illustration of this increasing role, The Provincial Party Education Committee is required to have this democratic and reflective meeting and all members of the Executive Team and UCPC participate. In this meeting, we do self-analysis and share our reflections, and then others criticise your daily work performance. Initially it was a requirement of the Super Communist Party Committee and it was embarrassing. So we discussed how to keep carrying on and we finally agreed this embarrassment is beneficial to improve our work and this meeting has become routine (CA7-9).

As the informant notes, the Central Committee of CPC plays a significant role in daily work of the UCPC. The university ensures that all the requests of the Superior Party are carried out as they help the UCPC to address practical challenges. The Central Committee of CPC every two or three years chooses different thematic education activities. The theme between 2014 and 2015 has been “Mass Line”3 and the Vice Secretary observed. During the campaign of Mass Line, we talked with staff face-to-face, aiming to hear their opinions about the university’s development. The President attended eight of these discussions in just one semester to listen to the suggestions of the staff (CA7-9). 3

“Mass line” refers to a guideline under which CPC officials and members are required to prioritize the interests of the people and persist in representing them and working on their behalf. The educational campaign was launched to boost ties between CPC officials, members, and the people, while cleaning up undesirable work styles such as formalism, bureaucracy, hedonism, and extravagance.

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Fig. 6.1 Governance form of Case A

Senior managers appreciate these activities as they create a good bridge between themselves and ordinary staff (CA5a-9 and CA7-9), and also improve the cohesion of the two groups (CA1a-9, CA2a-9, and CA4a-9). Figure 6.1 shows the governance form of Case A. The Commission of Discipline Inspection (CDI) set up by the Party, monitors the implementation of the various decisions of the Party. Since the majority of officials at all levels of government are also members of the CPC, the Commission is in practice the most authoritative anti-corruption and anti-malfeasance body. The Vice Secretary works as the Secretary of the University CDI, and he said The Council trusts us and gives us much autonomy so we must try our best to prevent any risk. The President also often emphasises that we must fully play the role of University CDI (CA7-8).

As the CDI is an official requirement, the UCPC sets up a CDI to monitor the implementation of Party rulings, the daily running of the university, the supervision of cadres, and the prevention of illegal actions.

6.4 University Constitution Case A formed its University Constitution when it first registered with the government. The University Constitution describes the rights and obligations of the shareholders, the University Council, the President and the internal organization and management. The Constitution ensures the university’s autonomy in personnel and finance, and prevents the shareholders from randomly intervening in the daily affairs of the university (CA5a-10).

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According to informant (CA1b-10), the Constitution has played a positive role in the institutional governance of the university. The university forms some regulations and mechanisms accompanying the development of university but some should be more specific, such as the decision-making procedures and accountability in management (CA1b-10).

With the development of the university, the regulations are gradually recognized by different stakeholders and existing barriers are reduced by amendments to the Constitution. In 2016, the Ministry of Education asked all private universities to revise their University Constitutions taking into account their specific characteristics. Since the shareholders recognized the success of the existing governance and the achievements of the Executive Team, they took the opportunity to detail the institutional governance and legislative rights of different stakeholders in the new Constitution. When I left, the shareholders had a comprehensive discussion; all shareholders signed a number of documents in particular the new Constitution that aims to maintain and improve the existing governance form. This can prevent negative influences when personnel change in the future (CA1b-6).

Case A held a number of special sessions to discuss revisions to the Constitution in terms of its developmental requirements. The Council Chair and the President observed In this new version, we revised some provisions and added some including Staff Congress and Student Congress (CA1b-10 and CA2b-10).

The revised version is twice as long as the previous Constitution and covers the regulation of the university’s activities from governance to teaching quality. It describes how the legal rights of staff and students should be protected. With the University Constitution as the core, the Party organization and the Union of Staff Representatives are the main supervisory mechanisms balancing power between shareholders and Executive Teams so as to achieve the autonomy of the university. This university aims to become a “university of centuries”, which means the university hopes to continue in its future development. “Our current work is committed to improving the university to obtain the right to award the bachelor degree” (CA5b-7). After it is able to award the bachelor degree, the university can recruit students who have higher academic scores. As it has been shown, the university’s form of governance has adjusted to its development. This study divided the process of development into two stages: Foundation and Establishment. In the establishment phase, as the university grows, two distinctive phases of governance appeared that can be called Development and Consolidation. This is shown in Table 6.3. In summary, Case A separated its Council from the Executive Team; the shareholders do not participate in daily management but have given the Executive Team sufficient authority and autonomy by establishing clear standards for their work. Both shareholders and senior managers intensified their commitment to the private university by transferring all its assets from the shareholders’ names to the university’s

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Table 6.3 Governance form in different developmental stages of Case A Stage

Development of the university

Governance

Foundation 1998–2008

1. A commercial group cooperated with the public university to establish a private college but the group withdrew the investment after two years 2. A new investment body took over the ownership of the college

1. The Constitution was adjusted and then the Council directly employed the Dean

Establishment 2009–to date

1. Case A was established in 2009 and recruited 2600 students in this year

Development 1. The institutional governance form was based on that of the college in the foundation stage and members did not change. The University Council was separated from the Executive Team 2. Apart from the President all Council members were shareholders

1. Student numbers expand to over 15,000 in 2015 and a new campus opens in 2015

Consolidation 1. The founding Council Chair left and the largest shareholder becomes Council Chair; the governance form remains the same 2. The Council recruits two external independent members 3. The University Constitution is revised to take better account of the interests of different stakeholders

name. All members of Executive Team were asked to end their status as personnel of a public university. The diversity of Council membership was widened by including external non-shareholder members, and the University Constitution has been revised to make clear the responsibilities and obligations of the different stakeholders.

Chapter 7

Governance in Practice: University with a Conjoined Council and Executive Team: Case B

Extract from field notes of the visit on February 26th, 2016 My interview with the President was delayed for two hours and had to be stopped several times because different colleagues came in to ask for instructions or to have him sign documents. The President who is 73 years old looks in good health and spirits. At 6:00 pm when the interview finally finished, the Chair came to ask whether they could have dinner together. That afternoon, two officials from the SED had reviewed the university’s reform programme and were invited to have dinner in the café. As they were previous colleagues of mine, the Chair invited me to join them. The university café has a separate area for the senior managers or university guests where they conduct discussions. Usually, the Chair, Vice Chair and President have meals in this room at a fixed time. I had lunch with them there when I conducted the first interviews in 2014. I met the Vice Chair of Council and two Vice Presidents again. As he did on my last visit, the President sat in the central seat opposite the door. According to Chinese culture, this seat belongs to the host. The Chair sits opposite the President which indicates that she is the second host. I did not recognise the special meaning of this arrangement until I interviewed one of the Vice Presidents. He said the President always sat in the host seat whenever discussions and meals took place, demonstrating his key role among senior managers. During the dinner, the President asked for wine but the Chair reminded him of the doctor’s recommendation that he should avoid alcohol.

7.1 Council and Shareholder After it registered as an Independent College in 2003, both Council Chair and President have remained in their roles to date. The Council, Executive Team, and UCPC have formed a combined entity; the Council Chair is the Vice President and Vice Secretary of the UCPC. She is responsible for finance, student recruitment, and logistics. The President is the Secretary of UCPC and is responsible for teaching and academic matters. In the same year, two further members were added to the Council who are the President and the Manager of the Teaching Department of the affiliated © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_7

113

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Table 7.1 Executive team of Case B 1

Position (Full-time)

Work background

Profession

Age

Chair (Vice President and Vice Secretary of UCPC)

Public Media

Engineer

49

2

Vice Chair (Vice President)

Research Institution

Senior-engineer

59

3

President (Secretary of UCPC)

HE

Professor

63

4

Vice President of teaching

HE

Professor

53

5

Vice-Secretary of UCPC

Cultural Media

Senior- journalist

61

6

Vice President (Dean of Faculty)

Cultural Media

Senior-editor

58

7

Vice President (Dean of Faculty)

Cultural Media

Professor

58

8

Vice President (Dean of Faculty)

Cultural Media

Professor

54

9

Vice President (Dean of Faculty)

Cultural Media

Senior- broadcaster

58

public university. They represent the public university. All Council members, other than the two representatives of the public university, participate in the daily running of the university. One of these representatives, after retiring from the public university in 2007, has worked full-time as Vice President in Case B. Throughout this process the senior managers remained stable with only one member retiring in 2015. The members of the Executive Team of Case B are presented in Table 7.1. As it shows, the governing role of the Council is integrated with the daily management of the university and forms a senior management team responsible both for decision making and implementation of the college’s strategic plan. As can be seen in the above table, the governance form of Case B overall is relatively flat. In this structure, half the members are also Deans of faculties who also work as middle-level management connecting the top decision-making authorities and the faculties. The largest shareholder at present executes three roles: Council Chair, Vice President, and Vice Secretary of UCPC. Another shareholder is both the Vice Chair of the Council and Vice President of the university. In order to avoid a possible confusion among staff and students about their roles, both the Chair and Vice Chair are described as Vice Secretary and Vice President on the official website. The main responsibility of the Chair is regulated by the Council Constitution as follows: . To lead Council to abide by the relevant government laws and regulations and to carry out the Council Constitution; . To convene the Council meeting according to the Council Constitution, to convene and chair a temporary Council meeting if some emergency occurs; . To lead the work of the Council and ensure that all the decisions of the Council are carried out; To nominate the candidates for President, which will then be discussed by the Council (D-CB2). It is noted that most of these responsibilities are similar to those of Case A. The Chair is also responsible for nominating the President. The President and the Chief of the Development Planning Department spoke about the roles played by the Chair,

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The Chair emphasises that the student is the centre of the university, and she loves students very much. Her smart phone number is published to all members of the university who can directly call her about any issue of the university (CB1a-6). Last year, one student suffered a heart attack at midnight in their dormitory. The student’s room-mates immediately telephoned the Chair who used all available resources to ensure the student was treated in the best hospital within just after 40 min. Otherwise, the student could die (CB5-6).

All shareholders are senior professionals in the field of cultural media and HE and participate full-time in the daily management of the university. The President and the Chief of the Directorate Office said, All of senior manager have a good educational background and rich work experience as senior managers in the HE field or media industry with high political qualities and administrative abilities (CB1a-6 and CB3a-6).

None of these senior managers have left after becoming a Council member except for health problems. The Chief of the Development Planning Department commented that, The membership of the senior manager team is highly stable. It has two authoritative levels: the first consists of the Chair and President, and the second consists of the other members (CB5-6).

Although the senior management team does not have an official regular meeting, the Council Chair, Vice Chair, and President usually have meals together in the special room set aside for senior managers in the university café and discuss work. The Council members who are Deans of faculty regularly meet the Chair and President at the Dean’s meeting once a week. Other than this, if these Vice President needs to discuss work with either of them, they go to the Cafe during mealtime. When there once was an official work meeting among the senior managers every week, there were always a lot of disputes about their different opinions when all they sit together. The efficiency is low and many contradictions in that time. Democracy sometimes is not a good thing easily resulting in conflict and disturbance (CB3b-6). Last year, one department needed to purchase some equipment costing 5 million RMB, the department Dean directly reported to the President and Chair, and after one week, all equipment was set up at the department. Real efficiency (CB1b-6).

Shareholders’ participation in the senior management team improves work efficiency and reduces the procedure of decision making. This combined form is described by the President as an important element to improve the rapid development of the university.

7.2 Council and Executive Team In Case B, the Chair and President have individual responsibilities: the Chair is responsible for decisions on the recruitment of students, finance, and infrastructure;

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the President is responsible for strategic development, teaching, and research. The Chair maintains an effective relationship and good communication with the President. The Chief of the Development Planning Department spoke of the importance of respect for both sides of them, The Chair and President respect each other in the work and they communicate well. The Chair does not sign any documents if it is not one of her duties and if anything should require the opinion of the Chair, the President would not take it (CB5-8).

He spoke of these two senior figures as not only acting but also thinking collectively; They share a similar education philosophy and agree with each other in the important decisions. They have clear responsibilities and cooperate better as time goes by, forming the highest authority of the university (CB4-6).

The responsibility for student recruitment has been taken over by the Council Chair because she brings extensive experience in working closely with the market and industry, and understands how these directly influence the income of the college. She also assumes the leading executive responsibility for university finance. The President assumes the leading responsibility for all promotional documents issued by the university and also leads on the affairs relating to teaching and research. Figure 7.1 shows the governance form of Case B. In Case B, considerable care is taken to achieve organizational clarity at the senior management level and to ensure effective and untroubled leadership. When shareholders participate in the daily operation of the university, they only undertake the duties allocated to them. Things such as teaching and research are the responsibility of the President—the Chair never took any decisions about them. She said these things shall only be decided by the President and reminded staff always to find leaders with specific duties. This maintains the authority of other leaders and over time the staff would ask different things in terms of the division of labour (CB5-8). More than half of the Vice Presidents serve as the Dean of a faculty and also accept some teaching assignments. Most of them participate in the daily management of different faculties.

Fig. 7.1 Governance form of Case B

7.2 Council and Executive Team

117

If any student needs to be absent for over a week, I must sign his request—hum—a lot of work, but it allows us senior managers to understand the specific circumstances of each department in timely fashion and thus better regulate daily management (CB3b-7).

Those Vice Presidents, who are also Deans, attended the Deans’ meeting weekly and discuss any issues arising in the different faculties with the President and Council Chair. Regarding the dispute between the Chair and the President, If they cannot persuade each other, the Chair would say, I am the Chair and I employ you, but the President always responds, I am the President and this is my university, and smiled with each other, then discussed it after few days (CB3a-4).

The President has worked in a public university for many years both as a professor and a senior manager and has accumulated rich experience in the HE field. He was President of a divisional campus of a public university before Case B employed him on conditional terms as executive President in 2000; he was confirmed as President in 2007. Both he and the Chair have a great deal of senior management experience, and as time goes by they have come to understand each other better and ensure potential conflicts are avoided and a clear forward direction of the university is promoted. The position of the President is regulated by the University Constitution as follows: The President is employed by the Council, approved by the Provincial Educational Department, being responsible for teaching and administrative management. In addition, the President is responsible for implementing the development strategy, drafting the annual work plan and budget, and formulating the regulations of the college. He should submit to Council recommendations on the appointment of candidates for Vice President and Chief Financial Officer, or on the dismissal of the Vice President or Chief Financial Officer (D-CB1).

In terms of this regulation, the President is responsible for implementing the development strategy of the university rather than to make the strategy. One of the informants said of the President, He is determined with a strong inner strength and plays a decisive role in the directional development of the university (CB3a-7).

The role of the President was crucial in taking decisions on important events in the development of the university. He remembers when in 2003 the government encouraged the private college affiliated public university to register as Independent Colleges. Our senior managers would not apply to be an Independent College because in that time the direction of the policy was not clear and we did not have enough capability to confront so many changes and challenges. But I firmly adhered to the aim to become an Independent College because the policy might change soon (CB1a-11).

Many private colleges worried about whether they would be able to survive if they became Independent Colleges, and many chose to wait to see if further policy support would become available and to observe the outcome of those who chose to change. The required standard of register for Independent Colleges from the government later becoming higher and after five years this policy even was halted. Many colleges therefore missed this opportunity.

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From our current development in terms of student enrolment and employment, the President’s insistence on his opinion plays a significant role to improve the development of the university (CB4-7).

In 2006, the document, Opinions on the Setting Up of the University during the Period of the 11th Five-Year Plan (Ministry of Education, 2006) states, Depending upon the regulations laid out, an Independent College can gradually transfer to become a private university with an independent organizational system separated from its mother public university depending on the needs and conditions. This was followed in 2008 by Regulations for Establishment and Management of Independent Colleges Sponsored with New Mechanisms and Models from State Universities (Ministry of Education, 2008), which codified and consolidated the status of the Independent College as an important type of private university, and it also encouraged Independent Colleges to separate from their mother public universities and to become independent private universities. In this year, there were ten Independent Colleges in Sichuan province. Case B was the first one to apply and be recognized as an independent private university. The Vice Chair spoke of how the decision was made by the senior manager team. We initially had a big debate about whether or not to separate from the mother public university to be a private university. Five Council members, of whom two firmly disagreed, and two, the Chair and I, tended to disagree. Only the President persisted with the separation. He first persuaded me and the Chair, then the other two shareholders until finally all of us agreed with his idea (CB2-11).

The regulations for the registration of an independent private university differ from those of an Independent College of a public university in that they require higher qualifications and numbers of staff members, better teaching, and infrastructure facilities on campus. Case B had to spend five years raising a large amount of funding to meet the government’s requirements. The President said, I made two decisions that are significant to the development of the university. One was to apply to be an Independent College from a private faculty of a public university; another was to separate from the public university so as to be an independent private university. Intuition and rich experiences told me that the opportunity may pass fleetingly if we did not catch it in a timely manner (CB1b-7).

As this quote demonstrates the President played a leading role in the decisionmaking. His contribution and abilities are recognized by the shareholders who very much trust him. I am old and can only propose education schemes and the strategic development plan; implementation like purchasing facilities and student recruitment is the responsibility of the Chair, who is energetic. My thoughts can be carried out in the university without any change (CB1b-7).

The President reveals a sense of his own limitations and accepts only the responsibilities he feels able to discharge. He also reveals a willingness to delegate responsibilities. This sense of creating a balanced senior team is reflected in the statement by the Vice President for teaching who said;

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The Chair has a daring spirit and is very pioneering; the President is rigorous and strict, but not conservative. Their personalities complement each other (CB3b-6).

However, the Promotion Law of Private Education states that the President of a private university should be an educational expert with at least ten years of work experience in the HE field and is under 70 years of age (National People’s Congress, 2013). The President of Case B is now 73 years old but retains his position. It is not easy to find appropriate people to cooperate with the Chair so we maintain the current condition (CB3b-12).

To find an appropriate President is one of the biggest challenges Case B currently confronts. This example shows how governance is based on existing conditions that sometimes differ from government regulations. A Vice President of a private university suggests that the arrangement in Case B does follow accepted lines; If the Council Chair participates in daily operations, he should be responsible for finance, but teaching, human resources, students’ education, all of these should be the responsibility of the President or experts (E3-6).

Commentators had opinions about this division of responsibility, with a member of the Provincial Review Committee in HE saying, The Chair is responsible for finance and infrastructure, which lessens the pressure on the President, but the teaching and research could be limited if the President does not have autonomy in finance (E2-6, E4-6).

In 2015, as the university was growing, the senior management team was expanded by recruiting two managers from public universities. They share responsibility with the Council Chair and President and are involved in the detail of many college matters.

7.3 University Communist Party Committee The Communist Party organization has been associated with Case B from its origin. In 1998, the Party Branch of the UCPC of the affiliated public university was formed. In 2004, after the Independent College was established, the Party Branch was upgraded to General Party Branch. Both the Party Branch and the General Party Branch were affiliated with the UCPC of the affiliated public university. In 2006, the CDI was established within the UCPC and the Council Chair was given the role of Secretary of the CDI. In Case B great attention is paid to the work of the Party. 42 percent of all employees including teaching staff are Communist Party members, in particular 54 percent among the teaching staff. Lectures on the Party are given every week and all the leaders of the UCPC, including the Council Chair, the President, Vice Secretary, and all Secretaries of Party branches in departments and faculties deliver lectures to students.

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The proportion of student members of the Party is high. You know the media is the mouthpiece of the Party and our students who will work in the media could not be anti-Party and antiSocialist. These student members of Party also play a positive role in the daily management of the university (CB1-9).

The Party Committee holds a weekly meeting which is convened and chaired by the UCPC Secretary. All the Secretaries of Party branches in faculty and departments attend the meeting. The UCPC office collects important matters for discussion and the President acts as the Party Secretary and determines the topics for the meeting. The final decision is made by the Secretary on the basis of discussions with the attendees. Both of them (Council Chair and President) convene a faculty Secretaries meeting every Tuesday at which ideological education, employment, safety and student affairs are discussed (CB3b-9). Every semester they deliver lectures in person related to the Party, including the updated documents and the history of the Party, to the staff and students (CB4-9).

Since 2004 the President has held the position of Secretary while the Council Chair holds that of Vice Secretary. The UCPC in Case B concentrates on ideology and the daily management of student affairs, and it pays little attention to the supervision of the university governance. In this combined form of Council, Executive Team, and UCPC, the supervisory function of institutional governance by the UCPC is weakened.

7.4 University Constitution When Case B applied to register as an Independent College in 2003, having a University Constitution was a key requirement in the process. The University Constitution outlines the aims and direction of the college, the rights, and responsibilities of stakeholders, the internal governance and management mechanisms, and its termination and transformation. In 2013, Case B revised its University and Council Constitutions when it applied to be an independent university in accordance with the requirements of the government. It gives details of the components, responsibilities, and decision-making procedures of the Council which takes up 55 percent of the entire Constitution. Similarly, its Council Constitution authorizes the Council to establish a supervisory board, to supervise Council members and senior managers, the finances, and any important decisions. According to the University Constitution, the college uses the Presidential Responsibility System under the Leadership of the Council, as does Case A in which the Council is the most authoritative decision-making body of the college. According to the Constitution, the Council consists of seven members who are shareholders or their appointed representatives, the President and staff representatives, of which onethird should have at least five years or more work experience in the HE field. However,

7.4 University Constitution

121

there is a gap between the Constitution and the practice of institutional governance. For example, according to the Constitution, The President’s Meeting is the essential decision-making forum. It is chaired by the President and all Vice Presidents. Assistants of the President and the Chief of the directorate office attend the meeting (D-CB1).

In reality, the senior manager team does not hold official regular meetings. One of the Vice Presidents said, Regarding to some other things such as the President’s Meeting or the Council meeting, we do it in terms of the actual need rather than the regulations of the Constitution. But it meets the requirement of the practice and runs well (CB3-10).

In other words, the university carries out the Constitution in terms of their developmental requirement rather than the text from the Constitution even though it is required by the government. In this process, the university has enough discretionary power. As in Case A, the process of university development is divided into two stages: foundation and establishment. In the establishment stage, as the university grows, two distinctive phases of governance appeared. In the second phase, the form of governance is consolidated and becomes mature. The form of governance is adjusted as the university develops. This is shown in the following Table 7.2. Case B combines its Council with the Executive Team and UCPC to form a unified and centralized senior management team. In this joint form, the shareholders Table 7.2 Governance form in different developmental stages of Case B Stage

Development of the university

Governance

Foundation 1997–2003

1. A private college affiliated to a public university 2. Original investors drop out and a new one took over

1. The college experienced three Deans in the first two years 2. The Council Chair as the largest shareholder reconstructs the senior management team

Establishment 2004–date 1. An Independent College of a public university 2. It has about 2000 students in 2004

1. The university separates from the public university to become an independent university 2. Student numbers expand to over 24,000 in 2013

Development 1. Two members of Council come from and represent the public university 2. Most members of Council participate in daily running Consolidation 1. Council, Executive Team, and UCPC integrate to form the most authoritative body. Two members of Council from the public university withdraw from the Council 2. The senior management team recruits two more members

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participate in the daily operations. There are two levels of authority: the top level consists of the Council Chair and the President, and the second consists of other senior managers who are the Deans of the different faculties and departments. The institutional governance thus has a flat authority structure.

Chapter 8

Governance in Practice: University with a Paternal Council and Executive Team: Case C

Extract from field notes of the visit on February 18, 2016 When I left the office of the President the car driver handed me a helmet and took me to the construction site of the new campus where I met the Council Chair. The engineering truck generated a rumbling sound accompanied occasionally by heave-ho expressions of construction workers. I saw the Chair again after the last interview in August 2014 when he was busy planning to decorate the staff office in the old campus. He is 60 years old and 1.65 meters high. His clothes were covered with mud and he wore grey rubber boots. He asked me how my lunch was in the student café and whether I was given enough support from his son regarding my visit. We found a relatively quiet place on the site and sat on the spot. A nearby worker came to give us a bottle of water and left without saying anything. He sipped his water and said “students can study here next academic year”. He speaks the local dialect and his voice is huskier than two years ago. He said, you’ve visited many private universities and are well-informed; if you have any suggestions please tell us. I could feel his honesty. We walked around the new construction site. He introduced each building to me, library, training base, student accommodation, staff office and cafeteria. I could feel his expectations and vision for the future of the university. The driver told me he always starts work around 7:40 in the construction site since the construction began a year ago. He said that as long as the university developed well, all of the effort will have been worth it. When I left the construction site it was late afternoon. He reminded the driver to buy some fruit for me since it will take me four hours by train for my journey back to home. During my two visits, the Council Chair ate with the construction workers in the canteen and wore the same uniform as them which gave no sense of him being wealthy or a senior management type of person.

8.1 Council and Owner In the mid-1990s, the senior managers proposed to change the ownership of the school from the County Agricultural Department to private ownership. Nine senior managers including the President and Vice Presidents bought all the shares from the Department. © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_8

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At that time, there were frequent conflicts between us about the issues of the school as we held different opinions. All of us were boss and nobody could persuade others. Some shareholders even proposed disbanding the school altogether (CC4b-6).

Before the ownership change, the President was recognized by the government as the official leader of the managers. When all the managers became the shareholders, the previous relationship was broken as all the shareholders held similar shares. However, they had different interests which needed to be balanced in a new governance system that was consistent with the changed status of the school and shareholders. After two years, the President bought out the shares of other shareholders and became the owner of this school. He committed all his attention and time to the school. One Vice President said, He (the owner) was forward thinking. When the school was a Broadcasting and Television School we were so satisfied with the achievement of the school and our salaries. Nobody thought the school needed to be transformed to be a vocational school, but he persisted it was necessary (CC4b-6).

The reason the owner was ‘forward thinking’ was that the number of people interested in agricultural technology decreased. By the middle of the 1990s, many farmers from the region migrated to cities like Guangzhou as laborers, at the same time increasing numbers of factories needed skilled blue-collar workers and the rising rural youth population was eager to study vocational skills. The school had already expanded its facilities which enabled a growing number of students to benefit from vocational training. As a result, the school quietly walked through its survival crisis and the number of students increased quickly. The highest number recorded of enrolled students was more than 38,000 in 2004. The Executive President said, In that time there was no decision-making committee and all decisions come from him. He worked at school 7 days a week and he knows the name of each of the 300 student’s counsellors. If we hold the collective party for the birthday of student, he would always come to congratulate (CC4b-6).

The owner of this school is seen as both owner and a committed vocational educator with considerable experience. The majority of students come from economically deprived villages and families. The school put forward the idea of “cultivating a student, making a family get out of poverty” (CC1a-6). It pays attention to skills training and discipline of the student. The school has made a great contribution to the students’ families by alleviating their poverty and has provided many skilled labourers for local companies. In 2005, the National Vocational Education Conference was held at the school during which the Minister of Education, Zhou Ji, praised it, saying that “it represents the developmental direction of middle vocational education in rural areas of West China” (CC1a-6). When the university was established in 2011, the Council was established as the governing body. It has five members: the owner is the Council Chair and the other members are his son and three relatives. His son said,

8.1 Council and Owner

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According to government regulations, the Council should have five members at least, so we put another three relatives on the list other than my father and me, but they do not play any practical role in the internal governance (CC2a-6).

Having five members of the Council thus satisfies formal legal requirements designed to ensure that the university is run in an approved manner. The responsibility of the Council is given in the University Constitution as, . To employ and decide the wage level of the President, Vice President, Financial manager and Principals of sub-organizations of Council; . To approve the University Constitution and developmental strategy and annual plan; . To approve the financial budget, final accounts and the investment to the college; . To decide the termination, combination or separation of the college and other important affairs of the university (D-CC1).

In fact only two members of the Council, the Chair and his son, play any practical role in its institutional governance. Since his son is responsible for daily running, all these responsibilities listed in the Constitution are taken by the owner himself. The Chair said, My responsibility is fundraising, infrastructure and facilities, such as the construction of the new campus, and to recruit senior managers. Regarding the daily management, I need to ensure that the fundamental running mechanism is fine (CC1a-6).

At this time, the owner was the university’s most authoritative and sole decision maker. The university employs an emeritus President who visits the university only once a year. The Executive Vice President has worked with the Chair since 1992s and maintains a good relationship with him; he has a good reputation among ordinary staff and managers alike. He and the Secretary are solely focused on the university’s daily management; if the Secretary is not available to take a decision on this, it is reported to the Council Chair, who makes the final decision. The Executive Vice President described his work as follows: The Secretary and I leave the office after 10pm every night and rack our brains. The Secretary is my employer and leader but the Chair asks me to supervise him. The opinions of two generations are sometimes different but I cannot oppose both of them. Sometimes it is hard (CC4a-7).

The Executive Vice President expressed some worries about the membership of the team with respect to governance and HE expertise. We did a lot of work that led to nowhere and followed tortuous paths. These could be avoided if we had professional leaders who had experience in the HE field. I suggested we recruit an experienced President, but he says it is too expensive and current student numbers are not enough to support the expenditure of employing a President (CC4a-8).

Not having a full-time President because it would be ‘too expensive’ suggests that cost is the key factor considered by the owner. I undertook fieldwork in September 2014 and again in February 2016. The timing of these interviews was crucial as they took place just before adjustments were made in governance, and so the analysis

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partly reflects the process of the adjustment. When I visited the university campus in 2016, the atmosphere among senior managers was very different from two years before. The Secretary said, My father and I recognised that the university needed to employ a professional President; and then construct a professional team otherwise we could not continue (CC2b-6).

In September 2015 an experienced President was employed. The Council Chair then withdrew from the daily running of the university to concentrate on the construction of the new campus that was scheduled to open in 2016. I interviewed the President, He (Council Chair) cares about students. All parents who come to visit students could have two days of free accommodation and food. He said government officials and leaders come to visit I treat them well; the parents of students come I must treat them well because my livelihood depends on them. I am moved by his values for students, and I try my best to consider all matters including decreasing the cost of improving the facilities of the university (CC3-6).

The owner has been involved with the school since the 1980s; indeed the development of the university from a school covers almost his entire professional life. Nevertheless it took him four years to recognize the importance of a professional senior management team and the need to employ an experienced President from the HE sector.

8.2 Executive Team When the university was established, an Executive Team led by his son was responsible for the daily running of the university. The team had seven members: the Secretary and two Vice Secretaries of UCPC, the Executive Vice President, two Vice Presidents, and the managers of the teaching departments and the personnel department. Many of the shareholder’s relatives work in different departments of the university. The Executive Team uses the one-vote system in which the Secretary has the right to veto the decisions of the Executive Team. The Executive Team cannot reach a decision if the Secretary of UCPC is absent from the meeting. Since the university does not have a full-time President, the power of the President is divided between the shareholder, his son, and an Executive Vice President. I can only independently make decisions on some daily things, like the expenditure under certain small accounts. The significant decisions are discussed with my father (CC2a-8). All matters relating to finance, human resources, and some teaching-related work must be reported to the Council Chair. The Executive Team convenes a meeting every morning, which is presided over by the UCPC Secretary. The Secretary said, We meet every morning at 7:30 and I am responsible for chairing the meeting. Much of the work is routine and procedural with advanced planning regarding the experiences while running the university (CC2a-7).

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In its daily operations, the senior management team is the highest authoritative body with the Secretary having most decision-making power. Decision-making on daily operations comes from bottom to top. The Executive Vice President said, Usually, the department puts forward issues or proposes them to its Vice President, who in turn brings them for discussion to the daily senior management team meeting (CC4a-7).

All members of the senior management team have worked in vocational education for many years but none of the members have previously worked in the HE field. The Vice Head for the education of the County affirmed that I am not optimistic about the future of the university if there is only the shareholder and his son. They should hire a professional team who has rich experience in HE field (CC7a-7).

Professionalization of the Executive Team significantly affects the development of the university. Being a senior manager, particularly the President, is a demanding position requiring an understanding of HE, management, and even business. However, its importance was ignored by the owner of the university. The Vice Secretary said. Since many teaching staff come from other cities and worked part-time here, they were only available on the weekend, so the university opened on the weekend instead, closing on Thursday and Friday (CC6-12).

This reveals potential future problems as eccentric arrangements are instituted to suit present needs rather than operating strategically with the interests of the university paramount. The Executive Vice President said, In the first years we were confused about how to run a university; where shall the university go? I struggled for three years and urged the owner to employ a professional President. We need a group of experts in HE to plan the development of the university and we can carry out their ideas (CC4a-12).

The Vice Secretary of the UCPC said, We tried our best to support an increased number in both students and teaching staff. It was a hard time since we had no professional President and experience (CC6-12).

Regarding the next step of the university, the Vice Head of Education for the County said, The university needs external intelligence, particularly a professional and experienced President who can bring good educational ideology, management approach and a good team (CC7a-12).

This suggests that the employment of professionals from the HE sector became an issue in the process of the university’s development. Table 8.1 presents the Executive Team of Case C. In 2015, a person who had previously worked in a local vocational university as the President and Secretary of UCPC was employed as Case C’s President. As is common, there is a link between holding a CPC leadership position and becoming an executive leader in an institution. His arrival came via the provincial level network

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Table 8.1 Executive team of Case C 1

Position (Full-time)

Work background

Profession

Age

Secretary of UCPC

Engineer

Engineer

32

2

Vice-Secretary of UCPC

Soldier

Senior manager in army

49

3

Executive Vice President

Education management

Senior manager in middle school of vocational education

47

4

Vice President

Education management

Ditto

47

5

Vice President

Education management

Ditto

45

6

Vice President (Manager of teaching department)

Education management

Ditto

48

7

Vice President (Manager of personnel department)

Education management

Ditto

48

of senior HE officers and, informally, instigated a new chapter in the life of this private university and moved it some way towards embodying the spirit of the legal requirements. The new President introduced the process of how he took over the role of President. The day I retired from the public university, the manager of the private education office of SED asked me if I would like to work at this university as its President. I knew nothing about this university and said I would think about it but after just a few minutes, the Council Chair called me and asked to meet me as soon as possible. We met on the second day and he drove a very cheap car and wore an old jacket covered with mud. When we met he directly said he would quit the management of university and entrust all things to me. I asked him about the condition of the university. He said it is at the bottom of the whole province. I was moved by his sincerity and I felt I was trusted by him (CC3-7).

His reasons for accepting were greatly influenced by the sincerity of the owner of the university and the fact that he was being trusted. This President quickly recognized the university’s problems. These included a lack of a strategic developmental plan, and a big gap between the quality and quantity of teaching staff and teaching facilities. There was an urgent need for the Executive Team to be led and motivated by someone with professional experience and given clear developmental direction. He initiated a series of reforms in teaching, student services, and several other fields and has proposed middle and long-term developmental plans for the university. A number of documents were produced to standardize internal management. The regular meeting of the Executive Team is still responsible for the daily operation of the university, but it is now held every two weeks instead of every morning. A Vice Secretary, who was a founding member of the university, described the current condition of this meeting in these words: We know exactly what will be discussed. Before the meeting, the member in charge for that meeting needs to prepare proposals based on relevant research into the topic and on consulting different opinions. Previously, we did not do this preparation and the decisions were made without careful thought. Our goal of student education and development are clear now (CC5-7).

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129

The previous Executive Vice President, who is now a Vice President, is responsible for the university’s cooperation with local industries rather than comprehensive management. I attended training for senior managers last week in capital city and will go to a conference there next week. I need to understand what other universities are doing and how to improve myself; I am very happy about these study chances which I did not have before the President came (CC4b-7).

The President talked about his task and objectives, The three major tasks of my tenure are to ensure the right developmental direction, to train youth and supervise the shareholder’s son. I also make mistakes but as a President, the most important thing is you should not be biased towards anybody and be fair (CC3-7).

By 2016 the construction of the new campus required substantial investment, so all surplus university income was being used for this purpose. The Council Chair said, My role is to provide logistical support for the development of the university including the construction of the new campus and I like to ask the opinion of President. You know the opinion of the educationist is significant (CC1b-6). Council Chair withdrew from the daily management after the President came because he had confidence in the President due to his professional ability that would enable him to exercise authority over the Executive Team (CC4b-7).

Another Vice President, who had been a consultant on teaching affairs since the university started, and who supervised the college’s application to become a private university in 2011, began to work full-time at Case C a month after the President came. He said, Our (himself and the President) work time here is limited, but we will wholeheartedly do our best. One of our significant assignments is training young cadres, getting through and constructing the growth channel for them (CC5-7).

The President formed a team to implement his reforms as soon as he arrived. He accepted all the senior managers, adjusting some of their positions, and appointed several professors to work at the university. He retained the owner’s daughter-in-law as Head of finance as “Things related to infrastructure and finance can be communicated and done better by family members so that I can concentrate on internal administration”. All regulations involving the staff, including the salary allocation scheme, and the revision of the University Constitution, follow consultation with staff. “The situation is getting better since they employed a professional full-time President (CC7b)”. A Vice Secretary of the UCPC said, Where the university will go and how the university will get there are all things we were previously confused about, but now we know much more. We have confidence in the future of the university (CC6-12).

The new President has examined the variety of complex relationships that have existed for many years in the university, and existing habits have been challenged and reformed. E5 who is President of another private university summed up the changes taking place when he admitted that

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The ideas of the President are not easy implemented because the development of a university depends on a team rather than a President. The ideas need to be carried out by a relatively qualified team (E5-12).

This reflects a real shift from a top-down structure of decision making towards a broader-based structure where decision making arises from professional expertise. When asked why the university did not consider employing a professional President in previous years, the Chair and his son affirmed, Many private universities seek professional senior managers who are demanding and it is not easy to find an appropriate one (CC1b-12 and CC2b-12).

Their response partly masks their resistance to appointing a professional President. As there are more than 100 universities in the Province, professional senior managers should be available. The Vice President said, Since the owner was very experienced in vocational schooling and hoped to decrease the cost, he did not employ the professional senior manager (CC4a-6).

The shareholder’s lack of experience at the HE level is omitted. The Head of the county educational department said, The local government and educational department required him to quit the daily running and employ a professional senior management team. In addition, with the development of the university, he recognised that it is necessary to have a professional senior management team (CC5-6).

County-level senior management encouraged the owner to understand what was required. In its early years the university’s income was limited. The Chair worried that “if the new President does not understand the condition of the university, he could return and cause troubles” (CC1a-6). The notion that there was a shortage of appropriate professional Presidents in the market might be overstated but that, “nobody was willing to come since we are in such remote place with a poor condition” (CC1a-7) is quite accurate. In fact the university is in a remote place where it is harder to employ professional senior managers.

8.3 University Communist Party Committee The Secretary of the UCPC is responsible for leadership and can make decisions within certain limits but any major decisions are still handled by the Chair. The official website of the university features a document to illustrate the role of the UCPC: The Implementation Measures of the Presidential Responsible System under the Leadership of the UCPC. According to this document, the UCPC in Case C is the highest authoritative body in the daily management. It states that, The university carries out the Presidential responsibility system under the leadership of the UCPC, which plays the leading role in the major issues of reform and development, teaching, research and makes the final decision (D-CC2).

8.3 University Communist Party Committee

131

The Secretary was awarded his bachelor’s and master’s degrees at an elite university in Beijing; after graduation he worked as a researcher at a well-known research institute. As the sole child of the family, he was required to come to work as the Secretary of the university. In terms of the requirements of the Promotion Law of Private Education, “the President is in charge of the daily running of the university”. It also lists a number of qualifications the President should have; “the President should be an educational expert with senior professional title in the education field who has at least ten years’ work experience in the HE field”. The shareholder’s son has no professional experience in HE which is one of the reasons he takes the role as the Secretary. The Party Committees are still responsible for the ideological and political education of staff and students. This function has been carried out by the Vice Secretary. The Secretary worked in the army before working in the university and the Secretary trusts the Vice Secretary a great deal (CC4b-7).

The Party is responsible for student affairs. All departments established a Party branch to carry out the political and ideological education of staff and students. The work of Party is combined with the Executive Team. We carry out all our work in terms of the requirements of the provincial party, especially the activity of “Mass Line”. All managers, including the managers of different faculties, hold a whole daylong meeting and everybody engages in criticism and self-criticism (CC6-7).

Before the full-time President was employed, the Secretary had to make many decisions on the daily running of the university. The President proposed a clear plan for the management and overall development strategy of the university. The Secretary described his current assignment, The President usually proposes solutions and tells us why these should be done. After he came, our internal operation is more standardised and what shall we do in every stage in the next decade are clear. I really admire him (CC2b-7).

He now works with the President as the representative of the shareholder. He said, Every time we need to spend big money I will tell the Chair as he needs to estimate if the finance is enough to support the project. He usually approves all our propositions (CC2b-6).

The Secretary represents the shareholder and engages with both shareholder and internal senior managers. His role in the university is like a bridge to connect the Council Chair and the President. Figure 8.1 shows the governance form of Case C.

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Fig. 8.1 Governance form of Case C

8.4 University Constitution In Case C, the Constitution regulates the rights and obligations of shareholder, staff, and students and also establishes the responsibilities of the internal governance components and structure. The section on the rights and obligations of the sponsors and organizers states that, The Council has seven members including a Chair and a Vice Chair. The Chair is held by the shareholder. Staff members elect a representative to participate in the Council on their behalf. In addition, more than a third of the members should have at least five years’ work experience in the HE field (D-CC1).

However, the regulations outlined above were not really observed. For example, three out of five (not seven) Council members are named in the official report but played no role in the practical work of the college. We copied the Constitution from another university and have not used it since the university was approved by the government. Many regulations in practice are established by their usage. This is appropriate in the initial stage of establishment because it is flexible to adjustments (CC2a-10).

A generous view of such a position is that it shows a welcome pragmatism about such matters. Others might argue that it constitutes a serious breach of regulations as having a Constitution was a necessary requirement when the university applied for registration. There is however a high degree of homogenization of Constitutions among the private universities. As noted above, when I revisited the university in February 2016, the SED required all private universities to revise their University Constitution. This university revised its Constitution in terms of the template from the Ministry of Education. The UCPC Secretary said,

8.4 University Constitution

133

The best way is to just comply with the template and for the government to revise it; otherwise it is too troublesome to revise (CC2b-10).

A retired President of a private university stated that, It is easier to be approved by the government if the shareholder does not require financial reward and writes it in the Constitution (E1-10).

Since the purpose of the Constitution is to meet government scrutiny, the university made every effort to do this, even though it meant creating an unrealistic document. In reality, the document is not followed because “it is not appropriate to the developmental reality of the university” (CC2a). One of the examples is that when the university was founded, the identity of the Council was defined by the University Constitution as follows, The Council is the highest decision-making body, which consists of the appointed representatives of shareholders, President and representatives of staff (D-CC1).

As stated earlier, three members of the Council do not play any practical role. The Secretary said, We plan to remove the three relatives and add the President, one teaching staff and one professional staff. I hope we can improve this in our Constitution in the next two years (CC2b-12).

As with Case A and Case B, the development of governance of Case C can be divided into two stages. This is shown in Table 8.2. Case C has a form of family governance. The owner controls the Council, and his son participates in daily management and receives daily information. In this form, the owner was the most authoritative person in the university until 2015. During this process, there is little delegation of responsibility based on the expertise and management ability of HE, and the overall capacity was very limited. When an experienced President was employed to work full-time, the owner withdrew from the university. The President’s assignment was to improve the existing management system and to mentor the shareholder’s son so that he can take on this responsibility. The new President gained the recognition and trust of the owner and gradually he is changing the form of governance. Family governance has the flexibility to adjust to the practical requirements of the owner. For example, in terms of government regulations the owner’s son may not be the President but as UCPC Secretary he could carry out the President’s role in the founding stage.

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Table 8.2 Governance form in different developmental stages of Case C Stage

Development of the university

Governance

Foundation 1980s – 2011 1. A branch of the Broadcasting and Television School in 1980s belonged to the County Agricultural Bureau 2. The school transformed into a vocational middle school and shares were bought by ten senior managers

1. Many conflicts among the shareholders until the President bought all shares in 1998 2. The shareholder worked as the President and the highest number of students enrolled in the vocational school was 38,000 in 2004

1. The newly established university recruited 700 students in 2011

Development 1. Council Chair was the only shareholder, and all members were the Chair’s relatives 2. The Chair’s son is the Secretary of the UCPC, in charge of the university’s daily activities 3. The university did not have a full-time President and no senior manager had work experience in the HE field

1. It has 3400 students in 2015

Consolidation 1. The university employed a professional President and the Council Chair ceased involvement the management 2. The President is responsible for daily management 3. The Chair’s son works with the President as a Secretary of the UCPC and as his apprentice so as to be able to lead the university in the future

Establishment 2011 – date

Chapter 9

Form of Governance and the Factors that Shape It

I have participated in the daily running so understand the difficulties of the university. You know, only the wearer knows where the shoes hurt. –Interview from a shareholder

9.1 Features of Different Governance Forms This chapter has explored the institutional governance system of the three case universities and how these systems have changed as the universities developed. In Case A, in order to reduce the risk of asymmetry of information between shareholders and employed managers, supervision is emphasized in the governance system. If the Executive Team is given autonomy in daily operations the shareholders are concerned to know how the Council’s directions are followed. This is achieved by the implementation of a number of supervision systems. For example, at the highest level, an annual evaluation of the performance of the Executive Team and senior managers is carried out by a third party appointed by the Council. At another level, the supervision role of UCPC, CDI, and Constitution has been developed by the government. The university has established the Union of Staff Representatives and the independent evaluation department as the supervisory mechanism of the daily running of the university. In this form, lines of authority and supervision become major issues of institutional governance. It therefore looks authoritarian with more formal regulations. In Case B, the Council and the Executive Team are combined, and the information flow between shareholders and other managers is symmetrical. However, the role of the supervisory and strategic decision making of the Council is weakened. This also results in the practice that some actions that are taken are different from the regulations of the Constitution. For example, the meetings of senior managers do not exactly run as stated in the Constitution. In Case C, the Council is controlled by the owner and as family members participate in daily operations they get daily information, but little or no formal supervision.

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5_9

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Both the Constitution and Council are merely symbolic to meet government requirements. The challenge is whether the family members are capable of managing the university professionally. All three universities operate within the same policy framework, but each adopts a form of governance consistent with its own characteristics. The various forms have different strengths and limitations and have been adjusted as the colleges mature into universities rather than remaining in their original forms. During this process, the characteristics of shareholders and the Executive Team play an important role in shaping the form of university governance.

9.2 Supervision Form In this study, both the principal-agent and stakeholder theories were applied to the current study. The shareholders of the private university are the ‘principal’ who employs senior managers such as the President to be their ‘agent’ in charge of the daily running of the university. However, the interests of shareholders and senior managers are usually different, so according to the theory, the shareholders need to supervise the senior managers’ actions to ensure they meet their requirements. In practice, the forms of supervision are varied and may include an annual audit of managers’ work performance, a formal contract between principal and agent, a defined financial budget, and a final account. There may even be direct participation in the daily management of the college. These different forms of supervision in practice result in different forms of governance. These may be classified into the two types of governance mentioned previously. The type in which the shareholders do not participate in management is called the supervision form by this study and the type in which shareholders participate in the management is called the managerial form. (Liu, 2019). Case A represents the supervision form. In Case A, the Council and Executive Team have a strong boundary with different responsibilities and rights, which are clearly set out in the Constitution and carried out in the practice. The role of the Council is strategic planning and evaluation of the performance of the Executive Team. Its members, other than the President, are not involved in daily management. The Executive Team is composed of professionals led by the President and has autonomy and operational responsibilities in the daily running of the university. According to the informant, this model emphasizes the importance of the regulatory framework and is considered a tool to decrease the influence of some unpredicted events. For example, one informant made the following observation about the situation when the founding Chair left the position, The established system is recognised by both shareholders and managers which is also continually improved in practice. Based on the existing system, the Council Chair is not the key figure in affecting the internal governance (CA1a-6).

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Nevertheless, communication between the President and the Council Chair plays an important role to affect the outcome of this supervision form. In our Council, the President is an Ex-Officio member and the decisions the Council makes need to be discussed with him (CA1a-6). We (the new Chair and senior managers) currently cooperate well together, and, as you know, it takes time to develop such a deep understanding between each other (CA2b-8).

The advantage of this model is that it optimizes decision making, allows the professional skills of the managers to be more fully implemented, and increases the enthusiasm and initiative of senior managers. For example, The President has thought a great deal about the university’s development (CA3a-7).

The Vice Secretary of UCPC said, The Council trusts us and gives us considerable autonomy, so we do our best to prevent any risks. The President has also emphasised many times that we must fully play our role in the University CDI (CA7-8).

As the Council proactively engages in strategic planning, its membership is adjusted to meet the university’s development requirements. In the later stage, it has recruited independent external members with rich experience in the HE sector. As the university is still growing and changes need to be made, the Council is likely to make further adjustments in the future. Professional experts in the fields of finance, auditing, estates, human resources, and student affairs are likely to be invited to join the Council. The characteristics of Case A, with ownership and implementation separated, and with the Council supervising the implementation of the Executive Team, illustrates the supervision form of governance. The problem with adopting the supervision form is the information asymmetry that develops between the shareholder and the Executive Team. In terms of the principle-agent theory, the shareholders, as ‘principal’, have insufficient information about the actions of the managers as ‘agents’ (Bosse & Phillips, 2016) since they lack information on the daily management and often professional knowledge in certain fields. As Council members are not involved in daily operations, they may not be aware if the Executive Team is not carrying out its decisions. Therefore, the principal is hardly able to assess the effectiveness of the agents’ work. As a result, transaction costs will increase in the institutional governance. In order to deal with the potential for contradictions and decrease the cost, a formal contractual relationship must be established (Davis et al., 1997; Jensen & Meckling, 1976). In this relationship, the Council acts on behalf of the shareholders to monitor the performance of the senior managers. As discussed in Chap. 3, the Council generally formulates the strategy, including the setting out of broad policy for management, risk control, and seeking new resources. These arguments were reflected in the following interviews from Case A. The university is required to accept the annual audit by a professional accounting institution invited by the Council (CA3a-8).

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The Council needs to know evaluation outcomes as they are an important indicator of salary levels and whether employment contracts should be renewed (CA2b-8).

In Case A, the Constitution regulates the position of the President. The university sets up the Executive Team as the highest decision-making body of the internal daily management of the university. The President is in charge of chairing the Executive Team and making decisions on the basis of a full deliberation and collective discussion of members (CA3a-7).

Shareholders also monitor the actions of the managers. If the finance budget scheme is not appropriately carried out, the Council would not know until the final account (CA1a-8). If the President does not understand the condition of the university, he could make a number of difficulties rather than improve the work (CC1a-7).

The flow of information between the Council and Executive Team tends to be structured and restricted. The asymmetry of information between the Council and the Executive Team is a worry to shareholders since unanticipated additional agency costs arise with the separation of ownership from daily management (Fama & Jensen, 1983; Klein et al., 1978; Williamson, 1985). The transaction costs could be high particularly if contracts are incomplete, and if either shareholders or managers break the original contract this can incur future additional costs. In order to avoid this, some shareholders directly participate in daily management. This is illustrated in Cases B and C.

9.3 Managerial Form Different from Case A, in Case B and Case C, all Council members are shareholders so that the ownership and daily running of the university combine, and there is no clear separation between the Council and the Executive Team. As the Council is deeply involved in daily management, its supervisory role decreases, and may even disappear. This institutional pattern of governance is categorized as the managerial form. In this form, shareholders usually have experience in the education management sector or in certain subjects of the university. They understand how to run a school or academic programmes. The strength of this form, according to the informants, mainly centre on decreasing the transaction costs and ensuring the efficient implementation of decisions. In terms of the stewardship theory, when shareholders participate in daily management, they work whole-heartedly for the university, and by doing the work themselves reduce the cost of employing senior managers. In this case, they understand the requirements of the daily running of the university. The information between the Council and Executive Team is more personal and circulates more widely. Therefore, the issue of information asymmetry between them and other senior

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managers is greatly decreased as are the transaction costs. A National Educational Inspector who is also a university President said, When shareholders participate in daily operations, they understand the situation of the university in detail and are able to make and carry out decisions directly, in particular those to do with finance and investment (E6-6).

In addition, decisions can be made and implemented by shareholders at the same time. The time gap between identification of the problem, decision making, and implementation is much shorter than with the supervision form. This high work efficiency with lower costs was perceived by informants as being particularly important when the university was initially founded. Last year, one department needed to purchase some equipment costing 5 million RMB. The department Dean directly reported to the President and Chair, and after one week, all equipment was set up at the department. Real efficiency (CB3a-6). I have participated in the daily running so understand the difficulties of the university. You know, only the wearer knows where the shoes hurt (CC2b-6).

The challenge of this form of governance is that with no monitoring mechanism any wrong decisions could easily leave the university at risk. This is particularly the case when a university expands and the organizational structure becomes more complex. The Bowen Institution of Lanzhou Jiaotong University mentioned in Chap. 1 provides an example of this. With no effective monitoring mechanism, the President, who was also the main shareholder, signed the dismissal document for a staff member suffering from cancer. This not only violated the interests of the staff member but also broke the law and negatively affected the reputation of the university. When shareholders participate in management, they have to spend more time addressing daily issues. This is likely to weaken the strategy-making role of the Council as well as its ability to monitor and evaluate the Executive Team’s performance. It is hard to keep the independence of the decision making from the operational knowledge. Some informants also felt that such involvement can have other negative effects; “it will prevent the motivation and positive attitude of the managers in the Executive Team (CA1a-7)”. “The senior managers tend to lose the authority for their work when the shareholder participates in the daily management (CA2a-7)”. “The voice of other managers of the Executive Team could be weakened” (O1-7). This form of governance might also result in an unclear relationship of leadership and responsibility between the shareholder and the Executive Team. A member of National Review Committee in HE who previously was a President of a private university commented, The Vice President is led by the President who should report to the Council Chair, but this model confuses the working relationship between the Chair and President. Who leads who? The staff will lose their sense of direction particularly when they two are hearing different views (E1-6).

This informant worries that confused leadership would adversely affect the clear division of the responsibilities between the shareholder and the senior manager.

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A private university is considered as an investment by the shareholder who does not trust other people to manage the university for them (O1-6).

As proposed by theories of principal-agent and stakeholder, the shareholders and senior managers have different interests so the shareholder needs to ensure the actions of the senior manager meet the shareholder’s requirements. Direct participation in the daily management is a way to supervise the work of senior managers and assure the maximization of their own interests. In this case, the senior managers tend to withhold their own opinions and follow the shareholder’s ideas. For example, “If the shareholder does not willingly accept my suggestions I usually do not persist. He is the big boss and this is his university” (E1-7). To maintain a harmonious relationship with the shareholder who participates in daily management can become an important daily challenge for the President, even requiring him or her to neglect some of the responsibilities of the position as President. A distinctive type of managerial form is family governance, which is shown in Case C. As Altbach (2005) observes, private universities using the family governance model typically have strong and centralized administrative control in the hands of family members. The advantage of this model is that there are many informal channels to communicate with each other. “I and my father often discuss questions on the university at home, sometimes even at 12 pm” (CC2a-7). But, as a member of the Provincial Review Committee in HE who is also the President of a private University notes “a single or a few shareholders can result in absolute power without supervision” (E5-6). A President also felt, The family members work in positions related to finance and human resources. When they do not accept the Executive Team’s decisions, for example, the member who works in the position of finance does not agree with decisions about expense and could easily veto the decision. If this often happens, the senior managers would lose their authority and subsequently their positivity and enthusiasm for their work (CA2a-7). In addition, the traditional ideology of paternity could affect the institutional governance. In China, to respect and follow the idea of father is a traditional ethic. “He, (the Secretary of UCPC) is obedient to his father and respects him very much” (CC5-7).

Both supervision form and managerial form have their different features. These are presented in Table 9.1. However, it needs to be noted that the supervision form can include some elements of the managerial form and vice-versa. For example, in the supervision model, the Council cannot supervise everything and in the managerial model, the Council may still retain some functions of supervision and overall strategic control of the university.

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Table 9.1 Comparison of supervision and managerial forms of governance Elements

Supervision form (Case A as example)

Managerial form (Case B and C as example)

Shareholders

Do not participate in management

Participate in management

Ownership

Separates from implementation

Integrates with implementation

Council holds the power

In strategy making

In both strategy making and implementation

Managers

Have strong authority and agency

Have weak authority and agency

Council and executive team

Have a strong boundary Have a structured and restricted Flow of information

Have a weak boundary Have a personal and expansive flow of information

Transaction cost

Is high

Is low

9.4 Factors that Shape the Form of Institutional Governance 9.4.1 Stages in University Development The analysis of data from the three case study universities indicates that these private universities go through various stages as they develop. Before the registration of the university by the government as an independent corporation, it usually takes some years to achieve the necessary practical skills and accumulate experience. For example, it initially runs as a school or an affiliated college of a public university. In this study, this is named as the foundation stage of the university. Once the university registers with the government as an independent corporation, the university may be regarded as in the establishment stage.

9.4.2 Foundation Stage In this stage, the governance form of all three cases experienced significant changes. In Case A, when the commercial company withdrew its investment, new shareholders were approached, and the Dean was reemployed. The college adjusted its Constitution to prevent potential future conflicts between the Dean and Council in terms of practical experience. After that, the shareholders and senior managers gradually built up a relationship of mutual trust, with a Constitution providing practical guidance as to how the college is managed.

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In Case B, the two-year start-up period was plagued by problems and the majority of shareholders withdrew their investment. A person with considerable previous experience became the largest shareholder and took over the management of the university. The Council and Executive Team were reconstructed, which had the effect of stabilizing the shareholders and ensuring senior managers were professional and effective in their work relationships. At that time, the current President was employed as Executive Vice President. This provided the basis for the establishment of the university in its present form. As was described earlier, Case C was originally a Broadcasting and Television School, and 10 years later it became a vocational middle school owned by 10 senior managers. After this, conflicts arose among the shareholders over the development of the school, and so the President bought out all the shareholders and was directly responsible for the daily running of the school. This ownership by a single shareholder and the particular form of governance laid the basis for the governance form when the university was established. Generally, change and instability are the main characteristics of the governance form in this early stage. The institution sets out as a new organization and quickly confronts many challenges and difficulties before finding an appropriate developmental pathway. The future of the institution was initially uncertain making it likely that shareholders might change or withdraw their investment; the relationship between shareholders and senior managers becomes unstable in which conflicts appear between different interest groups. During this time regulations and senior managers were frequently adjusted. In each case, the major shareholder became the founding Council Chair. In the later period of this stage, the rudiment of formal governance structure begins to appear that will greatly influence the shape of the governance in the next stage. Usually, two main types are observed in this stage, one is that the professional senior managers are employed and gradually built integrated into a mutual-dependent relationship with the shareholders based on their employment contracts such as Case A. The other approach was that the shareholder combined ownership with direct participation in the daily operations such as Case B and Case C.

9.4.3 Stage of Establishment 9.4.3.1

Development Phase

The establishment of the institute as a university marks the beginning of this stage. In terms of the size of the university, this stage could be divided into two sub-phases, the development phase, and the consolidation phase. In the development phase, the university recruited the first batch of students and saw a gradual expansion of student numbers. In case A, the number of students increased from 2,600 in 2009 to 15,000 in 2015. It operated a clear division between the role of the Council and the employed senior managers who constituted the Executive Team. The Council consisted of

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shareholders or their appointed representatives, and its members did not participate in the daily management, and it was the President’s responsibility to see that Council decisions were carried out. The governance form was stable, and this allowed the growth of mutual trust between shareholders and senior managers. In Case B, the number of students increased from 2,400 in 2004 to 24,000 in 2014. The Council, Executive Team, and Party organization became highly integrated. Another two members from the public university were co-opted onto the Council and all Council members form a senior manager team that participated in the daily management. The major shareholder works as the Council Chair who, with the President forms the first level of authority and the rest of the members form the second level in the institutional governance. In Case C, when it recruited its first batch of degree students its numbers increased from 700 in 2009 to 3,400 in 2014. The university did not have a full-time President and a nominal Council was appointed to fulfill the government’s requirements. The son of the owner worked as the Secretary of the UCPC and was responsible for the university’s daily management. Since there was a lack of professional staff from HE in both the Council and Executive Team, the university struggled to survive. Stability and development are the main characteristics of the form of governance in this phase, but this allows the size of the university to expand rapidly. Basically, the governance form in this stage continues like that of the later period in the foundation stage. The form of governance of each university in this establishment stage has distinct characteristics. The Council Chair in each case is the shareholder who holds the largest proportion of the shares or was an appointed representative of the shareholder, and most of the Council members were also shareholders. But, the division of power between the Council and President differs in each case. It is noted that at this stage, having a professional team led by a full-time President trusted by the Council Chair was important for the university’s development. Although the mutual trust between shareholders and senior managers was established, and the senior management team tends to be stable, the university continued to seek a more relevant form of governance to meet the emerging needs of the university.

9.4.3.2

Consolidation Phase

The increasing number of staff and students revealed the growing problems resulting from the more complex internal organizational structure. As the university continues to expand, it reaches the limits of the existing conditions, resources, and facilities. Its increasing speed of student enrolment eventually reduces and its student numbers plateaus and becomes stable. This shows that the university has entered its consolidation phase. The form of governance that existed with the establishment of the university is no longer able to meet the growing needs of the various stakeholders. Some adjustments to the form of governance happen. There are various possible types of adjustment such as the revision of the Constitution, the change of the Council Chair or President, and the addition of new members to both the Council and the Executive

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Team. At the same time, the external policy is likely to require adjustments to meet the new characteristics and requirements of the development stage. In Case A, when the founding Council Chair left, the largest shareholder became the new Council Chair. The university’s achievements led to the recognition of the advantages of the Presidential Accountability System under the leadership of the Council. Council membership was expanded to include two external members, and the Council continued to fine-tune the University Constitution in the light of its experience of running the university. The rights and responsibilities of the Council, the Executive Team, and the President were more clearly defined. The Council delegated more authority to the Executive Team in the university’s daily operations, but the President remained the chief authority responsible to the Council. In Case B, it updated from being an Independent College affiliated to a public university to become an independent private university. The Council and the Executive Team are still combined as this arrangement allows decisions to be made and implemented rapidly. However, after it separated from the public university, two Council members from the public university withdrew from the Council. Two more senior managers were recruited later, which was especially necessary as the university continued to expand in size. This was the first time the Council and the senior management team had undergone adjustment since it had been established. In Case C, the seriousness of the problems deriving from its form of governance became evident to the owner, with the need of some adjustments to the governance system. An experienced full-time President was employed to help construct a professional team, and the Council Chair ceased to be involved in the daily management. At the time of my fieldwork in 2016, the university was planning to replace three of the family members of the Council by the President and two representatives of the staff. Table 9.2 presents the years of the three case universities in different stages. The rapid expansion of the university seen during this stage has slowly revealed some of the limitations within the existing system. This requires the university to adjust its governance form to better meet the needs for future development, and prepare for the next developmental phase. The relationship between the shareholders and senior managers has now become more integrated. Adjustment based on the existing form of governance is the characteristic of this stage. Generally, the formation of institutional governance of a private university is a dynamic process, in which each stage is closely connected with the previous one. In each of the stages, key internal figures, in particular the shareholder sought the most appropriate form of governance that would be best for their university. Changes and adjustments tended to be radical in the foundation stage and then more stable Table 9.2 The years spent in different stages by the three case universities

Case

Foundation stage

Establishment stage Development

Consolidation

A

2000–2009

2009–2015

2015–

B

1998–2004

2004–2013

2013–

C

1983–2011

2011–2015

2015–

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Table 9.3 Features of governance form in different stages of the private university Elements

Stage of foundation

Stage of establishment Developmental stage

Consolidation stage

Student number

Small

Increased

Stable

Funding

Unstable

Stable

Stable

Regulations

Unstable

Stable

Stable but with adjustment

Senior manager

Unstable

Stable

Stable but with adjustment

Governance form

Unstable

Stable

Stable but with adjustment

Council member

Unstable

Stable

Stable but with adjustment

Relationship of the shareholders and managers

Critical and sensitive

Stable

Integrated

Future development

Uncertain

Tends to be certain

Tends to be certain

thereafter. The characteristics of institutional governance in different developmental stages are presented in Table 9.3. As a result of the changing environment and in response to the shareholders’ understanding of how best to confront challenges and shortages of key resources, different pathways were taken for various lengths of time. Thus, when considering the form of governance of a private university, not only the current status of governance need to be considered, but also how it has changed and what its developmental trajectory has been at different stages. As one interviewee said: The government should reduce unnecessary administrative interventions. What does this mean? For example, when we have a cold we sometimes do not go to the hospital but take a hot bath and have a longer sleep and then we recover. The university has its own endogenous mechanisms which could automatically work for many problems (O3b-2).

When analyzing the different forms of governance at different stages, it is clear that governance can be automatically adjusted at different speeds and in different forms to meet the needs of the development of the university. This is supported by Lynall et al. (2003) who note that the formation of governance is influenced by the life cycle of the organization. The existing form of operation changes when it no longer meets the requirements of the different stakeholders. In particular, when the university expands and internal affairs become more complex, the governance form will tend to greater decentralization with more professional members.

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9.4.4 Characteristics of Shareholders In each of the three cases, all shareholders are Council members and the Council Chair is either the major shareholder or the appointed representative of the shareholder. As was shown in Sect. 4.2, information asymmetry between the shareholder as principal and managers as agents is always a concern. Sometimes the shareholder does not understand how the institution is managed on a daily basis such as “If the financial budget scheme is not appropriately carried out, the Council would not know until the final account” (CA1a-8). “If the new President is not familiar with the university’s situation, a number of troubles could arise” (CC1a-7). Thus the supervision and autonomy of the Executive Team are key issues with which the shareholder is concerned. As a result, the principal, in order to avoid possible issues arising from information asymmetry, could employ different mechanisms to limit the agent’s authority which in turn affects the governance form of the university. First, the number of shareholders has an influence on the form of institutional governance. If there are a number of shareholders with similar shares, no single shareholder will have supreme authority, the same situation as when there is a mixture of individual and institutional shareholders. Authority and power needs to first be balanced and limited among these shareholders. Effective governance and transparent allocation of responsibilities on the Council and the management of the university is necessary for the shareholders to be confident about their investment. In order to maintain trustful governance and a prosperous development of a university, it tends to employ a professional Executive Team and give it enough authority in the daily management. As a result, the governance depends on contracts and a system approved by both the shareholders and the professional Executive Team. In return, senior managers are allowed autonomy more readily and are less reliant on the authority and power of a single owner or of over-dominant shareholders. Second, whether or not the shareholder or Council Chair directly participates in the daily management of the university, affects the governance form. When the shareholders have work experience in the education field and have enough time to manage the university, they are more likely to participate in daily management. For example, in Case A, shareholders worked in different cities and were busy on their other assignments. In Case B, all shareholders are senior managers or professionals in the core subjects of the university. In Case C, the owner had considerable experience in vocational education. As one informant noted, “Since the shareholder was experienced in vocational schooling and hoped to decrease costs, he did not employ professional senior managers” (CC4a-6). Another felt that “If the shareholder or a family member is qualified to be, or willing to be, a senior manager, they would work in the university” (E3-6). In such a case, the shareholder may become the main authority in both decision-making and daily management of the university. In practice, their work and educational backgrounds is an important influence on their emphasis and leadership style. Third, the shareholders’ expectations as regards the university affect the form of governance. “They may hope for financial return, social reputation and recognition,

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or may just want to contribute to society—or all of these” (E2-6). If the purpose of running the university is to obtain quick financial returns, the design of governance will support this purpose. For example, shareholders will participate in the management to directly control finance and cost without supervision. The university will employ few qualified managers and staff and will offer limited teaching facilities. Conversely, if the shareholder recognizes that getting a financial return from running a HE institution is a long-term process, or wants to contribute to society, they tend to prefer to choose a professional management team and develop a structure suitable for a longer-term strategy. Fourth, the founding Council Chair plays an important role in forming the initial institutional governance. In the founding stage, many things including shareholders’ investments, the form of governance, the future development of the institution, trust between shareholders and managers are uncertain and unstable. In this stage, shareholders may differ in their understanding of what is needed to run a university, as it also may differ between the shareholders and senior managers. The founding Council Chair needs to balance different interests and contradictions to ensure the development of the university. For instance, in Case A, “The Chair finally persuaded all shareholders to agree to the transfer of assets to the name of the university” (CA2a6). “The Chair trusts and gives enough authority to the President” (CA3a-6). In Case B, “The Chair has a daring spirit and very pioneering” (CB3b-6). “She respects the President very much and their personalities complement each other” (CB5-8). In Case C, the founding Council Chair is the owner of the university. “The Chair was farsighted…. we were so satisfied with the achievement of school and nobody thought the school needed to be transformed, but he insisted it was necessary. He worked at school 7 days a week and he knew the names of each of the 300 student’s counsellors” (CC4b-6). All the founding Council Chairs of the three cases have high levels of competence in some aspect as a senior manager such as foresight, diligence, and rational thinking. Their abilities appeal to and are recognized by their colleagues who like to work with them. In this process, the characteristics and leadership style of the Council Chair greatly affects the direction the university takes, whether shareholders and senior managers withdraw or remain in the institution and whether the university can deal with numerous difficulties to secure its survival in the initial years.

9.4.5 Nature of Senior Managers First, the comprehensive capability of the President is important to achieve the developmental object of the university. As Collins (1996) and Fielden (2008) argue, senior managers such as the President must have discretion in deciding the management of the university. In all three cases studied, the President has considerable influence on the development of the university and the internal form of governance. In Case A, “when some resistance and complaints appear, his (the President) perspective and capability is important so as to make the right judgment” (CA3a-7); “The President

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has the strong administrative ability and he has many ideas about the development of the college” (E5-7); “In our Council, the President is an Ex-Officio member and decisions the Council makes needs to be discussed with him” (CA1a-6). In Case B, “he (the President) is determined with a strong inner strength and plays a decisive role in the directional development of the university” (CB3a-7); “The President’s insistence on his opinion plays a significant role to improve the development of the university. From the perspective of our current situation in terms of student enrolment and employment, he made the correct decision” (CB4-7). In contrast, when there was no full-time professional President as in Case C, “we were confused about how to run a university, where shall the university go? I struggled for three years… and urged the owner to employ a professional President” (CC4a-12). “It was a hard time since we had no professional President” (CC6-12); “The university needs a professional and experienced President who can bring good educational ideology, management approach and a good team” (CC7a-12). Since the President is the primary person responsible for the daily management, he (she) plays an important role as to the development of the university and its institutional governance. Secondly, whether the senior managers can gain the shareholders’ trust and confidence or not, affects the delegation of authority from the shareholder, and thus the governance form of the university (Liu, 2018). As Trakman (2008) notes, the relationship between a Council and a President often affects the success or failure of governance and good governance requires strong relationships based on mutual respect, trust, and honesty between the Council, the President, and the Executive Team (CUC, 2014). In terms of the case studies, if the senior managers can gain the shareholders’ trust, the shareholders are likely to allow senior managers more control over the daily management of the university. In this process, the Executive Team becoming more professional is an important element affecting the trust and how much responsibility the shareholders tend to allow senior managers to take. For example, in Case A, “The President and his team are professionals in the management of HE and they are responsible for the daily running of the university” (CA3a-7); “The shareholders recognised the achievements of the Executive Team and authorised the separation model of Council and daily management in the revised Constitution” (CA1b-6). “The Council considers that I (President) understand each member’s work performance so it now asks me to be responsible for evaluating their work performance. After that I report the evaluation outcome to the Council” (CA2b-7). In Case B, “It is not easy to find appropriate people to be a President like the current one who was very trusted by the Council Chair” (CB3a-7). In Case C, “President is professional and we (owner and his son) trust him very much” (CC2b-7). “My role (owner) is to provide logistical support for the development of the university including the construction of the new campus and I like to ask the opinion of President. You know the opinion of the educationist is significant” (CC1b-6). “Council Chair withdrew from the daily management after the President came because he is now confident on the professional ability of the Executive Team” (CC4b-7). Third, intrinsic satisfaction and motivation have an influence on the willingness of the senior manager to contribute to the university. In terms of the stewardship theory,

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even though some actions could be for personal benefit, the manager may feel unable to adopt them out a sense of duty to the organization or its broader social aims and their personal commitment to the mission of the organization (Etzioni, 1975; Van Puyvelde et al., 2012). The above is shown in the case studies. For instance, in Case A, “If we (senior manager) do not do our best, we will feel sorry for students….I (Vice President) feel a sense of achievement when a number of Deans and teaching teams have progressed in their profession” (CA5a-7). In Case B, “I do my best to improve the university” (CB1b-7). In Case C, “whatever we (senior manager) do we should always try our best … maybe it is being faithful to education” (CC4a-7). These senior managers clearly felt a personal sense of responsibility and professional achievement that motivated their work and to maintain their passion and commitment. These managers gain intrinsic satisfaction from the acknowledgment of their colleagues, and they are willing to contribute to the improvement of the organization. Following this intrinsic satisfaction, the longer senior managers have worked in the university, the deeper their feelings for it, and in turn, the greater the likelihood that they will be given more authority to work in the daily management. For example, in Case A, “we (senior managers) separated the personal relationship with the public institution… the Council awards enough authority to us in the daily management” (CA5b-8); In Case B, “I have combined my life with the development of the university for almost twenty years” (CB1a-7); In Case C, “I have a deep feeling towards even the trees and bushes here. All my youth time are here” (CC4a-7). In addition, the turnover rate of founding members in the three cases was low, in terms of the interviewees, mainly because the age of retirement was reached. It is noted that the different interests could integrate with each other particularly when the key stakeholders consider the organization is a community of interests between different stakeholders, and these interests affect each other. This is demonstrated in Case A in which all its senior members emphasized that the private university is a community of interests. “These senior managers separated the personal relationship with the public institution; shareholders transfer the property rights of assets into the university. It means their entire interests bond them to the university and everyone will gain or lose interest collectively” (CA1b-8); “If the university develops successfully, the shareholders can get a good financial return and the senior managers will have a good career platform (CA1a-13)”. In this community, all interests of these stakeholders bind with each other. They gain or lose their interest together rather than one gaining at the expense of another.

9.5 Implications for the Private University This study shows how, in practice, the various universities within the common legislative framework responded with different forms of governance depending on their particular circumstances. What is learnt from these three cases provides an understanding of the governance within other private universities. Based on the data analysis from the specific cases, this study reveals six implications for the governance of

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private universities in China in general. These six implications are about the Council, the Executive Team, UCPC, University Constitution, the role of government, and the amendment of the Promotion Law of Private Education. First is the implication for the Council as a governing body. In terms of stakeholder theory, the Council needs to understand the interests of different stakeholders and then make decisions according to their various interests. One way of addressing this is to ensure that Council members represent the different stakeholders including staff, students, and independent external members. The case studies show how some shareholders, particularly the Council Chair, do participate in the daily management of the university. In terms of the principal-agent theory, their participation can lessen disagreements and avoid confusion of objectives between shareholders and senior managers. It can also reduce running costs and promote the efficient implementation of decisions. However, with the increasing student numbers, the management structure of the university becomes more complex. If shareholders participate in the daily management, then ownership, decision making and management become one, and power may then be concentrated in the Council Chair. This could give the Council Chair little time to consider future planning, emerging issues, and opportunities that the university has. As a result, the university might be in a precarious position with decisions being made subjectively by the Council Chair or a few shareholders. It could also diminish the enthusiasm and initiative of employed senior managers, and in particular the President. To avoid this, a clear statement of the responsibility and accountability of both shareholders and managers should be produced. It might also be useful to consider how the shareholder, as principal, establishes a mechanism to strengthen the monitoring of agents as well as providing professional evaluation and consultation, whilst still giving enough autonomy and authority to the managers as their agents. The performance of the Council should also be regularly evaluated to ensure the continual improvement of its effectiveness and transparency. This could take the form of an annual review as to how well the Council has met its goals and whether its decisions were consistent with its mission and values as stated in the University Constitution. In addition, a specific Constitution for the Council based on the university’s mission should be established as part of a mechanism to monitor the work of the Council. This would outline the principles of the Council including decision-making procedures at its meetings, and the appointment, responsibilities, and rights of its members. Second, it is recommended that the professionalism of the Executive Team is strengthened. In terms of the stakeholder theory, the senior managers are the only group of stakeholders who enter into a contractual relationship with all the other stakeholders, and who directly affect the performance of a corporation (Hill & Jones, 1992). Senior managers need to understand the intentions of different stakeholders as well as the goals of the university. The values they personally hold significantly influence the development of the organization (Williamson, 2002). Being a senior manager, particularly the President, can be demanding, as an understanding of management, administration, finance, business, and HE are all required. Their professional quality will not only improve the development of the university itself

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but will add to the shareholders’ confidence in the university would then award more autonomy to senior managers. The third is to maintain the independence of UCPC in the institutional governance in order to better supervise daily operations. The involvement of the UCPC in the governance of the private university is unique to the Chinese context. It is evident from the three case studies that the UCPC can and does play a constructive role in unifying the purpose of the university and lessening contradictions among managers in daily management. In the case universities, the role of the UCPC was welcomed by both shareholders and Executive Teams. In all three cases, the UCPC combined with the Council or (and) Executive Team to a considerable degree, almost becoming indistinguishable from them. When the President acts as the Secretary of the UCPC, power is highly concentrated in one person. This may simplify the procedures of decision-making, lessens agency costs and conflicts between senior managers, and also increases work efficiency. However, it might have a danger to make poor decisions if they are too autonomous in one person. Discussion of varying opinions is important at the senior management level as it can optimize decision making but in an over-lapping structure such as in combining the position of Secretary and President, the independent supervisory role of UCPC officials could be lost. The regulations give the UCPC the right to participate in the Council and Executive Team, and part of its role is to supervise the daily running of the university to ensure the Communist Party’s mission is achieved. It is proposed that there is a need to consider how to best maintain the independence of UCPC from the Council and Executive Team so as to better supervise daily operations. This is particularly important with the expansion of student numbers and the complicated structure of the university. The fourth implication is to enact the Constitution for the University. The importance of the Constitution was recognized by all informants in all three cases, in theory at least. Each informant believed that the Constitution was a necessary requirement providing a clear expression of the mission of the university and defines the different roles, responsibilities, and parameters for assessing the success of the Council and the Executive Team. However, in practice while some informants consider their work was being implemented in accordance with the University Constitution, others thought it would take some years before the Constitution was fully implemented. Private universities often face tensions between their various stakeholders; some stakeholders may take actions that benefit their own interests even though these may damage other stakeholders’ interests or the development of the university. In terms of the principal-agent theory, in order to clearly separate the responsibilities and interests of the principal and agent, a formal contractual relationship should be established. The Constitution can be considered as a contract among these stakeholders to regulate their different interests and should be taken seriously in terms of its drafting and implementation. Fifth, it is proposed that the government shall consider having a clear mechanism of monitoring and authorizing private universities with clearly different roles for governance. Some scholars have used the principal-agent theory to discuss the

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relationship of the government and the university. In terms of this theory, the monitoring and authorization is the key issue for the governance of private universities. Compared with the public universities, the private university usually has more flexibility to shape their own form of governance in terms of its practical requirements. However, this flexibility could result in a failure to properly protect the interests of students or the quality of education since the university prioritizes profit as was shown in the developmental experience of private HE. Improving HE is the responsibility of all the stakeholders especially that of the government. Effective monitoring of the governance of the private university should be made to protect the interests of the different stakeholders and improve the quality of education. In particular, the occasional symbolic compliance shows the need for better accountability at the system level. For example, in the five-year institutional review, the compliance with government directives should be seriously reviewed. The rapid increase of the private university sector in the past twenty years has led to the expansion of HE, but as it has raised a number of concerns. This study has explored how each of the three case universities responded to changing circumstances in adopting a particular form of governance. Based on the data analysis, some implications are proposed to improve the governance of private universities. It is worth noting that there are some fixed elements common to all HE institutions such as the interaction between the university and government, and a duty of care towards the different stakeholders of the university. The implications from this study could also be relevant and applicable to the governance of private universities of other countries. The study provides insights from an empirical investigation through case studies into the governance of private universities in China, and also a referential perspective for the governance of private universities in general for policy makers, senior managers, and academics. Currently, over seven million students study full-time in Chinese private universities. The private universities have been successful in attracting private capital to relieve the financial pressure on the government and satisfy the public need for HE. During this process, the diversification of institutional governance has become evident in different universities. In the future years, this diversification will continue as an essential feature of the private university. It is understandable that this diversification of institutional governance will develop as universities respond to changes in policy and other internal and external factors, but it must be kept in mind that the aim of governance is to improve the development of the university by allocating resources and to ensure the university serves and protects the interests of its different stakeholders. Above all they should enable young people to become appropriately skilled and equipped for life in modern China and an increasingly global world. In the past twenty years, the full-time student numbers of private universities increased from 12,000 to more than 7.08. The private universities have been successful in attracting private capital to relieve the financial pressure on the government and satisfy the public need for HE. During this process, the diversification of institutional governance has become evident in different universities. In the future years, this diversification will continue as an essential feature of the private university. It is understandable that this diversification of institutional governance will develop

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as universities respond to changes in policy and other internal and external factors, but it must be kept in mind that the aim of governance is to improve the development of the university by allocating resources and to ensure the university serves and protects the interests of its different stakeholders. Above all they should enable young people to become appropriately skilled and equipped for life in modern China and an increasingly global world.

9.6 Limitations of the Study Reflecting on the research journey, four possible limitations of this study are noted. While two might be seen to originate from the research approach adopted and are thus counter-balanced by the strengths of this approach, another two relate to the process of data collection and scale of the study. The first limitation might be the generalization of findings coming from comparative case studies. This method offers an in-depth understanding of three different cases and accounts for the complexity of different cases, and allows cross-cutting connections across cases. Three private universities with various histories, different lengths of time since they were established, size of the student body, and geographic location were selected. This allowed the research to concentrate on the particular objectives and illustrate how forms of governance and processes develop. Since there is a wide difference in economic and social development among provinces, these three case studies cannot represent the whole of the private university sector in China. Nevertheless, the study provides an understanding of how the governance forms and processes responded to external changes for the private university sector in China. Secondly, it could be that my own experience with private universities might affect the findings. It is well known that the researcher is also the instrument that facilitates the collection, interpretation, and analysis of the data. In order to avoid interference from my personal experience, a number of strategies were adopted, from the cases selected to the process of the data analysis. Furthermore, it was my previous work and experience with private universities that initiated this study and gave me the opportunity to interview senior figures. Thirdly, the spread and types of interviewees are limited, but they do include Council members, Secretaries of UCPC, Presidents of the university, educational administration officials from the government, and official examiners of HE. Even though all of the interviewees in this study held senior positions in private universities and have rich experiences in the governance of private HE, people with other roles may have different perspectives on the institutional governance of these universities. However, as illustrated, other roles such as the ordinary staff members and students tended to focus on the issues more relevant to their own subjects and department rather than the wider university governance. To change the spread and types of the interviewees would therefore mean the focus of the study would be changed

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because it is these senior managers who understand the operation and function of the university’s governance. The fourth limitation could relate to the reliability of the interview data. Some of the interviewees are my previous colleagues and others were introduced by these colleagues. Whilst some senior managers would be open and honest in such an academic interview, others might feel more restrained in discussing their personal experiences. But, data triangulation facilitates improved reliability of the interview data. The documentary evidence from the national, provincial, and university level was used to cross-check the accuracy of the information from the interviewees as was data from other interviewees who are within and outside the university. The second series of interviews conducted two years after the first allowed the checking of all information previously provided by the interviewees as regards to its consistency and coherence.

9.7 Revisit Three Cases Studies The first phase of fieldwork of this study was carried out in 2014, followed by a second visit in 2016. Shortly before I completed this book, in 2020, I revisited three case study universities. They had developed and made some changes to their governance forms, but one feature that they had in common was that they all had Party Secretaries appointed by the provincial education department. In 2016, the Implementation Opinions on Strengthening Construction of the Party in Privately-Run Schools was issued (CPC Central Committee, 2018). It requires the selection and appointment of Secretaries of UCPC in private universities, viewing this as the top priority of Party construction in private universities; it also made provisions to strengthen the training, management, and supervision of the Secretaries in order to improve their overall quality and performance ability. The document requires these Secretaries to have excellent political credentials, be familiar with the work of Party construction, to understand the requirements of good management and dedication, and be accredited as a Party Secretary to work full-time in private universities. In 2020, the Organization Department of the Sichuan Provincial Party Committee and other five departments (2020) issued the Implementation Measures for the Selection and Assignment of Party Secretaries in Private Universities in Sichuan Province. This document allowed the provincial government to appoint Party Secretaries to all private universities in the province, emphasized the pre-eminence of the Party Organization and political core, and made it responsible for ascertaining that private universities were run in accordance with the laws and regulations. Case Study A separated the role of President and Secretary of the UCPC; a Vice President had worked as the Secretary since September 2017. When the newlyappointed Party Secretary takes office in 2022, the previous Secretary of the UCPC will return to work as a Vice President. Other leaders have not changed although a new Vice President joined with the expansion of the university. In December 2020,

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the university shareholders sold 51% of its shares for a total of 750 million yuan, marking the partial listing of the university on the stock market. The university now has two campuses in two cities, covering an area of just over a square kilometer and a building area of 580,000 square meters, and serves over 16,000 full-time students. It has six schools: Information Technology, Urban Construction and Design, Intelligent Manufacturing and Transportation, Medicine and Health, Economics and Management, and Education. The university vigorously promotes cooperation between itself and businesses and has established cooperative relations with more than 500 large enterprises and industry associations. It has 229 off-campus practice and training bases and 232 on-campus practice and teaching experimental and training units. Case Study A had planned to become a bachelor degree-awarding institution in 2020 but, due to a policy adjustment by the Ministry of Education regarding the development plan of colleges, it failed to upgrade. In 2018, the shareholders set up a technical college that shared educational resources with Case Study A. It provides full-time technical education and training for adult students to encourage the local economic and social development of middle and senior skilled workers and technicians. The technical college mainly carries out skilled personnel training for the labour force, as well as high-skill training of in-service employees of enterprises. This type of technical college is managed by the Department of Human Resources and Social Security while the universities are administered by the competent departments of relevant provincial education departments. The technical college awards certificates authorized by the Department of Human Resources and Social Security while the certificates of graduates from the private universities are issued by the Ministry of Education. It should be noted that technical colleges are not the same as vocational colleges, which mainly serve students aged 18–22. Technical college courses and awards vary according to the requirement of different types of work and enterprise; training time varies between three months to a few years, and the awards reflect the levels achieved according to the length of training time. As with other cases, the Secretary of UCPC in Case Study B was appointed by the provincial government and took office in 2022. Case Study B’s previous President retired but continued to work as a consultant. The director of the Board still works full-time on campus. The university celebrated its 25th birthday in 2022 involving thousands of people including its alumni, current staff and students, representatives from the field of higher education, government, industries, and local community. At the end of the ceremony, the sound of the song ‘Meet again after twenty years’ echoed around the grounds of the university. The lyrics of this song indicate a sense of hope and confidence for the future development of the university.1 Case Study C passed the Quality Evaluation for the Cultivation of Talents in Vocational Higher Education introduced in Chap. 7. As part of this evaluation, the group representing the government proposed a number of suggestions regarding the 1

Extract from the lyrics of this song —We date our wishes and portray the future blueprint again and let us meet in another twenty years. In that time, we will review and comment on all achievements we have done; In that time the achievements we have done will be gratifying.

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development of the university, including the training of teaching staff and young managers. Once completed, Case Study C had hoped to be upgraded to awarding bachelor’s degrees. However, this was denied by the provincial education department who believed that the overall quality of Case Study C, including the teaching and many other areas, did not meet the requirements of undergraduate education. In 2022, the Party Secretary appointed by the government took office, and the original Party Secretary, the son of the founder, became the Executive Director of the Board. He still works full-time at the university and continues to be responsible for everything bar the work related to the construction of the Party.

9.8 Recommendation for Future Studies In order to further explore the subject of governance in private universities future research could be undertaken in four directions. First, the form of governance for any institute is a dynamic process which has to adjust to meet the needs of the changing social environment and the different developmental stages of the university. To monitor the continuing development of the form of governance of these three case studies would be a significant study for the future. In addition, this study has chosen to focus on the governing group as the best means to explore the dynamics of governance from these three cases. It would be worthwhile expanding the interviewees to include other stakeholders such as members of the academic and administrative staff. This could provide a more multi-faceted account to explore the activities of the university and its management. Second, this study did not select the universities because they are exceptional in terms of performance, and nor did they have any means of systematically relating governance to academic standards. Nevertheless, it can be assumed, from the literature and research conducted in other settings, that clear and transparent governance does have a positive impact on the extent to which the needs and expectations of stakeholders are met. Further research could look at the correlation between the form of governance in a private university and performance by studying quality assurance mechanisms, and how institutional changes might be triggered to improve the development of the universities. In addition, it is noted that leadership is a component of governance, so a related aspect is how the style of leadership shapes the relationship between the President and the Council, how this affects governance and the performance of the university, and how the power fluctuates among these key actors and organizations and affects governance. It is recognized that governance embraces the issues of autonomy, academic freedom and accountability, and the culture of the organization. Conduct of studies across the organization and its cultures can be included for further work. Third, the appropriateness of the semi-structured interviews used throughout this study has been demonstrated where informants were free to enter the discussion of the topics explored by the study in terms of the questions asked and their own ideas. This however does not exclude the use of other methods such as questionnaires that

References

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could be used to collect data from a larger number of participants. Such studies may be conducted when senior managers gathered to attend training sessions and conferences. Nevertheless, it is noted that questionnaires may limit the opportunity to ask the informants more about particular or follow-up questions because it is a once-and-for-all investigation. Therefore, mixed methods could be used to explore the study in the future. It is worth emphasizing another organization in the private universities, the Academic Committee. In 2014, the Ministry of Education promulgated the Regulations on Academic Committees of Universities which required universities to set up Academic Committees in order to improve the academic management system. It states that the Academic Committee, as the highest academic authority in the university, is responsible for and has the final say on decision-making, deliberation, evaluation, and consultations regarding academic affairs. In terms of the Law of Higher Education (National People’s Congress, 2015), it asks the university to set up Academic Committees to finish the following duties including to examine and approve plans for discipline construction, and teaching and scientific research; to evaluate achievements in teaching and scientific research; to investigate and settle academic disputes; to investigate and identify academic misconduct; and to examine and decide other matters concerning academic development, academic evaluation, and academic norms. In three cases, Academic Committee is led by Academic Vice President or President which belongs to internal management led by the executive team. This study therefore does not illustrate how the Academic Committees operate in private universities, but it can be a research in the next step. Finally, similar studies of the internal governance of private universities could be undertaken in other provinces to examine how the different economic and social contexts affect the issues of governance. It would also be worthwhile to conduct similar comparative studies in different countries with diverse social and political backgrounds, and the relationships of state and university across the world, although this would change the research design and require more researchers to participate in the project.

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Appendix

Interview Questions

1 2 3 4

What do you think were the motivations to improve the development of private universities in past years? How have you been involved in the field of private HE? What kinds of roles have you taken on in this field? Could you introduce the institutional governance of your university? As a member of Council (Executive Team or UCPC), what is your responsibility? (a) Do other members have same or different role? (b) What are the overall responsibilities of the Council (Executive Team or UCPC)? (c) How are the important decisions generated, carried out, and supervised in the implementation?

5

If the interviewee has more than two roles: (a) What is the relation between these roles? (b) Is there any conflict, advantages, or disadvantages between these roles? (c) What reasons encouraged you to take on more than one role?

6

In some private universities, the shareholder participates in the daily operation of the university. In others, the shareholder does not participate. (a) What are the advantages and disadvantages of these two situations? (b) What do you think were the reasons why universities employed those two differently?

7 8 9

Who are the stakeholders of the private university? What are their interests? What are their roles in institutional governance? What do you think about the role of the University Constitution in the institutional governance of the private university? What are the most influential decisions your team (or you) have ever taken in terms of institutional governance?

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 X. Liu, The Development and Governance of Private Universities in China, Governance and Citizenship in Asia, https://doi.org/10.1007/978-981-19-6063-5

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10 What are the main challenges facing the private university (your university) as regards to the institutional governance? Is the university (or government) doing anything to address these challenges? 11 How does institutional governance assure the qualification of student’ training? 12 Is there is any gap between the document policy and the implementation of the policy in the practice as regards governance of the university? What do you think about these differences? 13 In terms of governance of private universities, what is the role of government? 14 What is the ideal relationship between government regulations and university actions as regards on the institutional governance in the private university?